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International Econ - Chapter 4 MC quiz - Specific factors model and Income distribution

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cmarquardt94's version from 2016-09-26 21:02

Section 1

Question Answer
The degree of a factors specificity is directly related to...?the amount of time required to redeploy the factor to a different industry
The degree of a factor's specificity is inversely related to...?the mobility of the factor, with more mobile factors having less specificity
In the Specific factors model, a country's production possibility frontier is ___ because of ____.PPF is a curved line because of diminishing marginal returns
Under perfect competition, the equilibrium price of labor used to produce cloth will be equal to..?the marginal product of labor in the production of cloth times the price of cloth
In the specific factors model, a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to..?increase by 5%
In the specific factors model, a 5% increase in the price of food is accompanied by a 5% increase in the price of cloth, will cause the production of cloth to..?remain unchanged
In the Specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause the production of food to..?remain unchanged
In the specific factors model, a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to...?increase by less then 5%
In the specific factors model, a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause the production of cloth to...?decrease
In the specific factors model, a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause the production of food to...?increase
memorize

Section 2

Question Answer
A country that DOES NOT engage in trade can benefit from trade only if...?pre-trade and free-trade relative prices are NOT identical
In the specific factors model, the effects of trade on welfare are___ for mobile factorsambiguous for mobile factors
In the specific factors model, the effects of trade on welfare are _______ for fixed factors used to produce the exported good?positive
In the specific factors model, the effects of trade on welfare are ______ for fixed factors used to produce the imported good?negative
The effect of trade on income distribution...?can be significant in the short run
A country's budget constraint states that...?the value of exports must be equal to the value of imports
In modern economies...?restrictions on international labor mobility are common
In the two-country model of international labor mobility...?the effect of migration is to cause real wages in the two countries to converge
In the two-country model of international labor mobility, the long-run equilibrium assumes...?that the desired nd actual migration are equal
In the two-country model of international labor mobility, migration results in...?increased global output, although some groups are made worse off
memorize