Suppose Country A, a labor-abundant country, produces only wheat and cloth. The following equations illustrate the prices and costs of wheat and cloth in the country. The numbers indicate the amounts of labor and land needed to produce a unit of wheat and cloth. 'W' is the wage rate and 'r' is the rental rate of land.Price of wheat = 1w + 2rPrice of cloth = 2w + 1rSuppose Country A engages in free trade and the price of cloth increases from $3 per unit to $4 per unit. The price of wheat remains unchanged at $3 per unit. The wage rate and the rental rate change to ________ and ________, respectively.

Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?

A) The supply of cheese decreases. B) The supply of cheese increases. C) The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese. D) The supply of cheese stays the same and there is no change in the quantity supplied of cheese. E) The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.

What is the unemployment rate if there are 170 million people employed, 25 million people unemployed, and 35 million not in the labor force?

A) 14.7% B) 13.7% C) 12.8% D) 10.9%