As Relative Prices in Various Industries Change Due to

question 8

Multiple Choice

As relative prices in various industries change due to
Trade, the marginal product of the mobile resources
Used in the expanding industry __________, and the
Marginal product of the mobile resources used in the
Contracting industry __________.

• A)rises; falls
• B)falls; rises
• C)remains the same; remains the same
• D)changes by exactly the same percentage; changes by exactly the same percentage

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Definitions:

Demand For Shoes

The total amount of shoes that consumers are willing and able to purchase at various prices during a given period.

Perfect Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information, leading to firms being price takers.

Market Power

The ability of a firm or group of firms to influence or control the terms and conditions of the market to some degree, often through controlling supply or manipulating demand.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power and price setting.