There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is
200 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are
A) PX = 30, PY = 80.
B) PX = 40, PY = 60.
C) PX = 60, PY = 120.
D) PX = 80, PY = 130.
A
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The common term for a severe recession is a
A) bottoming out. B) economic adjustment. C) depression. D) downturn.
Suppose that FDI has "spillover" benefits for the recipient nation (such as spurring technological innovation, more FDI, or growth in labor productivity). These spillover effects might help explain why:
a. in Singapore, wages fell in the short run. b. in Singapore, wages fell and returns to capital rose in the long run. c. in Singapore, wages rose and, depending on the calculation used, returns to capital were close to original levels in the long run, which contradicted the HO model. d. in Singapore, absolutely nothing changed in either the short or the long run.