Economics: The Basics 1st Edition by Mike Mandel

Exercise 11

Identify whether each of the following situations is an example of the market expansion effect or the labor pool effect.
a) A furniture maker shifts production from the U.S. to China.
b) Merck, the big U.S. pharmaceutical company, hires more scientists in the United States so it can develop drugs to sell in overseas markets.
c) A U.S. newspaper hires reporters in India to write about the U.S. stock market.
d) A U.S. magazine hires reporters in the United States to write about the Indian stock market.