The idea that immigration lowers the wages and employment of native-born workers is based on:

both (a) the supply and demand model and (b) the findings of research

the findings of economic research on the actual impact of immigrants on local labor markets.

neither (a) the supply and demand model nor (b) the findings of research(a) nor (b), immigration is not an economic issue.

an increase in the supply of labor will lower the wage rate and the quantity of native-born employed in a supply and demand model.

A typical firm in a perfectly competitive industry will have what type of long run average costs?

increasing long-run average costs.

decreasing long-run average costs

long-run average costs has no relationship to industry structure

constant long-run average costs

When a firm is producing at the quantity of output q* where Marginal Revenue equals Marginal Cost in the short run, then the firm is:

Either profit maximizing or Loss minimizing.

Productively efficient.

Loss minimizing.

Profit maximizing.

In the long run perfectly competitive firms operate at productive efficiency because:

there are NO economic profits so price equal average total cost.

price equals the marginal cost.

price equals minimum average total cost.

there are economic profits so price is greater than average total cost.

Which of the following is the characteristic of a perfectly competitive industry that allows for long-run adjustment to restore efficiency when there is a change in costs or demand?

the large number of firms allows each firm to grow larger or shrink in size.

the standardized good which allows for consumers to substitute one firm's goods or services for another.

the interdependence of firms allows them to meet together to respond to changes.

easy entry and exit allows the number of firms to change in response to changes in costs or demand.

30. The countries of Ari and Zona have different cost ratios for coffee and bagels:

Ari: 3 pounds of coffee = 1 pound of bagels

Zona: 5 pounds of coffee = 1 pound of bagels

Assuming that the two countries want to consume both coffee and bagels and they could trade with each other, in what product should each nation specialize in? Please answer in the text box and be clear which country should specialize in what:

Ari should specialize in (your answer)

Zona should specialize in (your answer)

34. The graph below showing the costs and benets of producing and consuming gasoline. The dark line labeled Sp shows the Supply curve based on producers' costs, and the dark line labeled Dc shows the Demand curve based on the consumers' benets. (Note, this is the same graph as in #33). Which of the following shows the excess quantity produced by a free market as compared to the social optimum quantity? 0 Is the excess quantity (pick the best answer) Q the distance from q1 to q2; (3) the distance from q1 to do; 0 the distance from p1 to p2; O the distance from p0 to p2; 33. The graph below showing the costs and benets of producing and consuming gasoline that leads to an external cost. The dark line labeled Sp shows the Supply curve based on producers' costs, and the dark line labeled Dc shows the Demand curve based on the consumers' benets. (Note, this is the same graph as in #32, with prices and quantities labeled). Which of the following points shows the optimum price and quantity when there is an external cost? 0 q1 (12 Q Would the optimum price and quantity be: p2 and q1 0 p1 and q2 0 p1 and q1 0 p2 and q2 32. Production and consumption of gasoline has an external cost of air pollution that can damage health and contribute to climate change. Use the graph below to show the external cost of the production and consumption of gasoline. Which of the lines labeled (A), (B), (C), or (E) in the graph would show the total or social costs curve that includes the external cost? Pick the best answer. P A Sprgdusm B O the line labeled B Q) the line labeledA O the line labeled E O the line labeled C 31. Given the specialization in your answer to question #30, would Ari and Zona be willing to trade with each other at the ratio of 1 pound of bagels to 7 pounds of coffee? No, Ari would gain from trade but not Zona. O No, neither Ari nor Zona would gain from trade O Yes, Ari and Zona would both gain from trade. O No, Zona would gain from trade but not Ari