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Initially, Workers in the Shoe Industry and the Computer Industry

question 74

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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, so 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, wages in the shoe industry ________ and wages in the computer industry ________.


Definitions:

Mildenhall Treasure

A significant hoard of Roman silver tableware from the 4th century, discovered in Suffolk, England in 1942.

Oceanus

In ancient Greek mythology, Oceanus was the titan god of the river Okeanos, believed to encircle the world, symbolizing the unexplored ocean.

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