Using the specific factors model, assume that strawberry production requires the specific factor of land, tractor production requires the specific factor of capital, and labor is variable. If the United States is capital abundant compared to Mexico, and Mexico is land abundant compared to the United States, then in the short run with trade, which of the following is true?
A) Mexican wages will rise more than the increase in the price of tractors in Mexico.
B) U.S. wages will rise less than the fall in the price of tractors in the United States.
C) The owners of capital in the United States will see a larger increase in their incomes in percentage terms than the increase in the price of tractors.
D) The owners of land in Mexico will see a smaller increase in their incomes in percentage terms than the increase in the price of strawberries.
C
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Which of the following is not a difference between monopolies and perfectly competitive markets?
a. Monopolies can earn profits in the long run while perfectly competitive firms break even. b. Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost. c. Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not. d. Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.
To ensure that ________ will be accepted, the U.S. government implicitly promises the public that it will not print money so fast that it loses its value.
A. commodity money B. barter cash C. paper money D. exchange rates