"Crowding out" refers to ...
Select one:
a. reduced exports due to rising exchange rates.
b. supply-side tax cuts reducing entitlement spending.
c. reduced consumption due to increases in marginal tax rates.
d. a reduction in the availability of private capital.
d. a reduction in the availability of private capital.
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France is capital abundant and Italy is labor abundant. Shoes are labor intensive and wheat is capital intensive
Draw diagrams to illustrate the pre- and post-trade equilibria for each of the two countries including the production points, the consumption points, the international price, and the volumes of exports and imports for each. Be sure to identify which country has comparative advantage in which good. Which factors gain and which lose when trade is opened between the two countries? Explain carefully.
Declining-block quantity discrimination makes sense if
A) buyers of smaller quantities are more price sensitive than buyers of larger quantities. B) buyers of smaller quantities are less price sensitive than buyers of larger quantities. C) demand for the good is perfectly elastic. D) the lower price for larger quantities encourages all consumers to purchase the larger quantity.