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Initially, Workers in the Shoe Industry and the Computer Industry

question 37

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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 ________.


Definitions:

Activation Energy

The minimum amount of energy required to initiate a chemical reaction, effectively determining the rate at which the reaction will occur.

Enzyme

Biological molecules that significantly speed up the rate of virtually all of the chemical reactions within cells.

Catalyzes

To increase the rate of a chemical reaction without undergoing any permanent chemical change, often pertaining to the action of enzymes.

Cofactor

A non-protein chemical compound or metallic ion that is required for a protein's biological activity to occur.

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