In the specific factors model, a 5% increase in the price of food accompanied by a 10% increase in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in
the welfare of the fixed factor in the production of cloth. A) an ambiguous change; a decrease; an increase
B) an ambiguous change; an ambiguous change; an ambiguous change
C) a decrease; an ambiguous change; an ambiguous change
D) an increase; a decrease; an increase
E) an ambiguous change; an increase; a decrease
A
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An argument in favor of multilateral trade liberalization (multilateralism) over preferential trade agreements (regionalism) is that multilateralism results in less trade diversion
Indicate whether the statement is true or false
If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller. This phenomenon is due to
A) moral hazard. B) adverse selection. C) economically irrational behavior. D) gains from trade.