In the Specific Factors Model,a 5% Increase in the Price

question 52

Multiple Choice

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to ________,the production of cloth to ________,and the production of food to ________.

• A) increase by 5%; remain unchanged; remain unchanged
• B) increase by less then 5%; decrease; increase
• C) increase by more then 5%; increase; remain unchanged
• D) remain constant; increase; increase
• E) remain constant; decrease; decrease

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Definitions:

Dominant Price Leader

A firm that has the largest market share within an industry and whose pricing decisions are often followed by other firms in the market.

Monopolist

An entity, individual, or company that is the sole supplier of a particular commodity or service in a market, often resulting in the power to control prices and market conditions.

Market Demand

The aggregate amount of a product or service that every customer in a market is prepared and able to buy at different price levels.

AU Optronics

A Taiwan-based company specializing in the manufacturing of TFT LCD panels used in various electronic devices.