Critically evaluate the following statement. "I am definitely in favor of free trade but only if it means fair trade."
What will be an ideal response?
Much of the time arguments like this are really disguised arguments against free trade. The only way for free trade to work is if it makes both parties better off. Otherwise, there would be no point in trading. Making both parties better off than they were before seems fair. However, it might not benefit both parties by the same amount which is most often the case in trades of any kind. So if the definition of fairness in free trade is narrowed to only include trades that provide the same net benefit to all parties than it is likely this will mean that trade won't happen at all.
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Which is distributed more equally: income or wealth?
What will be an ideal response?
If both prices increases by 50%,
A) budget constraint will be unchanged. B) slope of the budget constraint stay the same. C) slope of the budget constraint will decrease. D) budget constraint will shift outward in a parallel fashion.