If a single union supplies all the labor in a competitive labor market, the union probably will
A. increase labor supply to raise employment.
B. restrict labor supply to raise wages.
C. increase union membership to increase wages.
D. act like a competitive firm.
Answer: B
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Why is NAFTA a free-trade area requiring rules of origin rather than a customs union?
a. A free-trade agreement allows politically sensitive tariffs of each nation to remain unchanged. b. A customs union also requires rules of origin. c. The overall level of U.S. tariffs was much higher than the overall level of tariffs in Mexico and Canada. d. The overall levels of tariffs in Canada, Mexico, and the United States are similar, making rules of origin irrelevant.
Which of the following is considered by economists to be the most fundamentally scarce?
a. money b. ideas c. needs d. food e. physical resources