Initially, Workers in the Shoe Industry and the Computer Industry

question 37

Multiple Choice

Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad, which causes domestic shoe prices fall. At the same time, foreign consumers purchase more computers, raising the relative price of computers. As a result of these changes, the demand for labor in the shoe industry ________ and the demand for labor in the computer industry ________.

• A)increases; increases
• B)increases; decreases
• C)decreases; increases
• D)decreases; decreases

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Definitions:

Short-Term Memory

A capacity for holding a small amount of information in mind in an active, readily available state for a short period of time.

Stimulus Decays

The gradual weakening of a stimulus's impact over time, leading to a decrease in the response it evokes.

Maintenance Rehearsal

A cognitive process involving the repeated review of information to retain it in short-term memory.

Proactive Interference

The interference by old learning with the ability to retrieve material learned recently.