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

question 3

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 ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in the welfare of the fixed factor in the production of cloth.

• A) a decrease; an increase; an increase
• B) a decrease; a decrease; a decrease
• C) no change; no change; no change
• D) an increase; a decrease; a decrease
• E) an increase; an increase; an increase

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Definitions:

Assumptions

Beliefs or ideas taken for granted without proof, often forming the basis for decision-making and reasoning.

Neutral Buffer

An unbiased or impartial intermediary area or substance that mitigates the effects of extremes or facilitates the resolution of conflicts.

Direct Format

A communication style that is straightforward and clear, minimizing misunderstanding by stating information explicitly.

Delivering Bad News

The process of communicating unfavorable or disappointing information to someone in a sensitive and thoughtful manner.