Problem 1
If a country has relatively abundant unskilled labor, with scarce land and capital, it is more likely to have a comparative advantage in which of the following industries? Check all that apply. \(\left[\mathrm{LO}_{17.1}\right]\) a. Food service. b. Textiles. c. Agriculture. d. Financial services.
Problem 2
Suppose Ghana discovers it has lost its comparative advantage in the production of maize. Which of the following could explain the loss of comparative advantage? Check all that apply. [LO 17.1] a. Maize-processing technology developed in Ghana spreads to other maize- producing countries. b. Decline in global demand for maize. c. Immigration of cheap labor into Ghana. d. Growth of low-skill service jobs in Ghana.
Problem 10
Suppose a country where capital is scarce and most of industry is labor- intensive with lowskilled labor moves from autarky to free trade. Which of the following do you expect to happen? Check all that apply. [LO 17.6\(]\) a. Owners of capital become wealthier. b. Wages for labor increase. c. Income disparity between workers and owners of capital increases.
Problem 11
Suppose two countries are considering a new agricultural trade agreement with each other. Country A has abundant low-skill labor and scarce land. Country B has abundant arable land but little population. In which country do land owners support a trade agreement? In which country do workers support a trade agreement?
Problem 12
Suppose a country has abundant capital but scarce labor. Which group would be more harmed by a trade embargo: owners of capital or laborers?
