International Econ - Homework 2 questions - for 1st midterm

cmarquardt94's version from 2016-09-23 23:38

Section 1

Question Answer
as more labor is used, holding capital constant...the [marginal product of labor] decreases
for trade to take place, a country MUST face a world relative price that is...[different] from the relative price that would prevail in the absence of trade
When opening up to trade, and economy...[exports goods whose relative price has increased] and (exports the goods whose relative price has decreased)
Trade hurts...the factor that is [specific to the import -- competing sectors]
within each country that opens itself up to international trade,some factor owner [gain], but other factor owners [lose]
Why do goods get [imported] ?because it is relatively cheaper to produce those goods abroad than at home
Producers in the exporting country benefit as the good's [relative price] rises to...the world level

Section 2

Question Answer
The factor that is used [intensively] in the [production of the exported good] _____ from the good being traded?gains!
The majority of economists tend to view the [income distribution effects] of trade as?relatively minor
Economists believe that addressing the [adverse income distribution effects] via [transfer payments] is ____ to no trade at allPreferred!
Why do economists believe that addressing the adverse income distribution effects via transfer payments is preferred or better than no trade at all?They argue that the benefits from free trade are [great] and economies can [support the losers from trade] with some type of transfer payments if necessary
Are those who [lose from free trade] typically MORE or LESS effectively organized than those who expect to gain?the losers are typically [MORE effectively organized]
What does it mean if we say that economists approach the 'trade issue' holistically?it means that they emphasize the 'greater good' to society over the impacts felt by its parts
Movement of [labor] from a Foreign country to the domestic(Home) economy will...increase the [marginal product of labor] in Foreign
According to the [one-good model] international mobility of labor...?increases the world's output