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5. Canada goes to considerable lengths to protect its television program and magazine producers from U.S. competitors. The United States often seeks protection from food imports from Canada. From an economywide viewpoint, these efforts are:
a. Political motivations to impose government control over various aspects of the two economies
b. Desirable since they protect the jobs of entertainment workers in Canada and farmers in the U.S.
c. Desirable since without them Canadian cultural identity will be weakened and the U.S will suffer food shortages.
d. Misguided because the enhanced output from specialization based upon comparative advantage is restricted.
8. Germany and China are countries that trade with each other. If Germany has a comparative advantage in cars and China has a comparative advantage in shoes, which of the following is a correct statement about the effects of trade between these nations?
a. Both countries will lose jobs through trade and be worse off
b. There will be a net loss of employment in China
c. Both countries are likely to be better off, and world production will increase
d. Germany will lose jobs in the car industry
10. Money Prices 2003 2004
Hospital Room(1-day) $250 $275
Hotel Suite (1- night) $350 $375
Based on the table above which of the following is true?
a. The money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased
b. The money prices of both goods increased the relative price of hospital rooms decreased and the relative price of hotel suites increased.
c. The money prices of both goods increased and the relative prices of both goods increased.
d. The money prices of both goods increased and the relative prices of both goods decreased.
Two students, Ryan Wattenberg and Emma Bennett are discussing the idea of convergence over coffee. Ryan considers convergence to be true in theory but impractical in the real world. He claims that most low-income developing countries are stuck in a cycle of poverty and so cannot catch up with developed countries. With increased globalization, Emma feels that the developing countries are growing and will converge with higher-income countries eventually. Zoey Smith, a friend of theirs, however, thinks that the evidence on convergence is rather unclear. Despite the fact that developing countries are growing much faster than the developed countries, she thinks that they will not be able to catch up with the developed nations in the near future.
Which of the following, if true, would strengthen Emma's argument that developing countries will not catch up with developed countries?
A. Most developing nations are at the point where the cost of capital exceeds the marginal product of capital.
B. The number of bilateral and multilateral agreements relating to technology transfer from developed to developing nations has significantly increased.
C. With low public investment in healthcare, the cost of private healthcare as a proportion of average income is very high in developing.
D. Since cash flows from foreign sources are considered volatile, many developing countries have capital controls and other regulations that restrict the flow of foreign investment.
E. Unlike the developed nations, most developing countries do not have extensive government-sponsored social security programs.
Outsourcing and offshoring are interesting topics that we are used to hearing a lot about. Regarding goods and services, everyone is eager to use offshore manufacturing, decrease tariffs, and make trade easier. Now, we see the complete opposite when it comes to labor. There are more restrictions, more visas, and talk of fences not only in the United States but also in Europe, where more and more immigrants are going. So, yes, employees in developed countries lose their jobs to offshoring and face additional competition from immigration. That is the general idea with which the labor movement gets identified.For this discussion, answer the following questions: How has outsourcing helped developing and emerging economies? On the other hand, how has it hindered the economies of developed countries? Does outsourcing only hinder developed countries, or is outsourcing providing different opportunities for employees and businesses? For example, the retraining of manufacturing employees has had a boost on community colleges and higher education in general.
