1. (2 points) "European labor markets are less flexible than North American, leading to different results. Nevertheless, these results are an optimal expression of different preferences". Explain the meaning of that statement and comment on it. 2. (2 points) Explain how the simple economic logic of support for farmers through MFN tariff (Chapter 4) created a global problem when applied as economic policy in the EU. Be sure to give at least two examples of its unintended consequences. 3. (1 point) What factors of production contribute to economic growth? Can any of them be relied upon to create endless long-run growth?\fWelfare effects of a tariff Home price Home price Foreign price Foreign supply ! Home E demand Foreign | i ' demand Quantity Home Quantity imports