In the Specific Factors Model,a 0% Increase in the Price

question 68

Multiple Choice

In the specific factors model,a 0% 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 less then 5%; increase; decrease
• B) increase by 5%; remain unchanged; remain unchanged
• C) increase by more then 5%; increase; remain unchanged
• D) remain constant; increase; increase
• E) remain constant; decrease; decrease

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Definitions:

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is unattainable.

Federal Trade Commission

A US government agency whose primary purpose is to enforce civil antitrust law and promote consumer protection.

Interstate Commerce

The trade, traffic, or transportation of goods, services, or money across state boundaries within the United States, regulated by federal government.

Price Discrimination

A pricing strategy where identical or very similar goods or services are sold at different prices by the same provider in different markets or to different buyers.