In the Accompanying Graphs, the Pre-Migration Labor Force in Country

question 154

Multiple Choice

In the accompanying graphs, the pre-migration labor force in country A is 0d and in country B it is 0u. Domestic output in country A will, after the immigration,

• A)decrease by area abc.
• B)decrease by area adec.
• C)increase by area abc.
• D)increase by area adec.

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Definitions:

Excise Tax

A tax imposed on specific goods, such as tobacco and alcohol, typically gauged per unit.

Downward-Sloping Demand

The typical relationship between price and quantity demanded, indicating that as price decreases, demand usually increases.

Upward-Sloping Supply

A supply curve that shows an increase in the quantity of a good or service supplied as its price rises, reflecting direct relationship between price and quantity supplied.

Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of consumers to price changes.