Question 1

Immigrants into the United States have the strongest effect on the wages of:

Accepted Answer

A)  college graduates. 
B)  high school dropouts. 
C)  high school graduates. 
D)  one another.

Question 2

Evidence in the text indicates that the long-run effects of immigration on overall U.S. wages remain nearly constant (0.1%), which is consistent with the long-run (Heckscher-Ohlin) model. However, there are differing effects across workers' educational levels. What are these differing effects and why might they occur?

Accepted Answer

The answer of Evidence in the text indicates that the...

Question 3

When the supply of labor increases, according to the specific-factors model, which of the following is likely to happen?

Accepted Answer

A)  The number of workers employed will decrease. 
B)  The wages for workers will decline. 
C)  The marginal product of labor increases in all industries. 
D)  The overall wage in the economy increases in the short run.

Question 4

Consider an economy that only produces steel and shoes; steel is capital intensive and shoes are labor intensive. How will emigration of labor from this economy affect the marginal productivity of labor in the long run?

Accepted Answer

A)  It will fall. 
B)  It will not change. 
C)  It will rise. 
D)  It will only change in the short run.

Question 5

In the long run (the Heckscher-Ohlin model), immigration will lead to:

Accepted Answer

A)  a rightward shift in the receiving country's production possibilities frontier. 
B)  a leftward shift in the receiving country's production possibilities frontier. 
C)  no change in the receiving country's production possibilities frontier. 
D)  a rightward shift in the sending country's production possibilities frontier.

Question 6

U.S. immigrants from Mexico are mainly _________workers and U.S. immigrants from India are mainly ___________workers.

Accepted Answer

A)  low-skilled; highly skilled 
B)  middle-income artisans; performance artists 
C)  male; female 
D)  younger; older

Question 7

During the 1960s and 1970s, some northern European countries actively recruited migrants mainly from Turkey, the former Yugoslavia, Greece, and Italy. In contrast, today most migrants to Europe come from:

Accepted Answer

A)  Iran, India, and Pakistan 
B)  Syria, Iraq, and Afghanistan 
C)  Nigeria, Ghana, and Senegal 
D)  Uzbekistan, Kyrgyzstan, and Tajikistan

Question 8

Proposed European immigration policies are best described as trying to place immigrants:

Accepted Answer

A)  proportionately across all EU countries. 
B)  mainly in richer EU countries. 
C)  in select industries. 
D)  mainly in southern EU countries.

Question 9

In the Heckscher-Ohlin model with two goods and two factors, an increase in one factor will cause:

Accepted Answer

A)  an increase in the production of the good that uses the factor intensively. 
B)  a decrease in the production of the good that use the factor intensively. 
C)  an increase in the production of the good that does not use the factor intensively. 
D)  no change in the production of either good.

Question 10

The text estimates that the long-run effect of migration from 1996-2006 on wages of all U.S. workers was, on average:

Accepted Answer

A)  -3%. 
B)  -1%. 
C)  0.1%. 
D)  0.6%.

Question 11

Because immigration raises the marginal products of nonlabor factors of production, in the short-run owners of nonlabor resources often support:

Accepted Answer

A)  open borders. 
B)  tighter restrictions on immigration. 
C)  controls on the flow of foreign direct investment (FDI). 
D)  immigration of persons only for humanitarian reasons.

Question 12

Of the 11% of the U.S. work force with advanced degrees, those who are foreign born make up:

Accepted Answer

A)  18% of those with Ph.D.'s. 
B)  less than 10% of those with Master's degrees and Ph.D.'s. 
C)  40% of those with Ph.D.'s in science and engineering. 
D)  30% of those with Master's degrees.

Question 13

In the short-run (specific-factors) model, an FDI inflow into a country's manufacturing sector will cause its production possibility frontier:

Accepted Answer

A)  to shift outward for both sectors. 
B)  to shift inward. 
C)  to shift outward for manufacturing only. 
D)  to stay the same.

Question 14

Which of the following would one expect if there were no trade in goods but resources were free to move among countries?

Accepted Answer

A)  Labor will emigrate from the capital-abundant country. 
B)  Labor will immigrate to the capital-abundant country. 
C)  Labor will immigrate to the capital-scarce country. 
D)  Labor will emigrate from the labor-scarce country.

Question 15

Consider a hypothetical economy in which only computers and shoes are produced and in which computer production is capital intensive compared with shoe production. If two resources are being used, labor and capital, then any increase in immigration in the long run:

Accepted Answer

A)  will cause the capital-labor ratio to increase in the computer industry. 
B)  will cause the capital-labor ratio to increase in the shoe industry. 
C)  will cause the capital-labor ratio to increase in both the industries. 
D)  will increase the number of workers employed in the shoe industry.

Question 16

In the Heckscher-Ohlin model with two goods and two factors, an increase in either factor will be absorbed by the economy, changing the outputs of each good but leaving factor prices unaffected. What is the name of this result?

Accepted Answer

A)  factor price insensitivity 
B)  factor price equalization 
C)  factor price theorem 
D)  factor price absorption

Question 17

The text cites estimates of the long-run effect of migration on wages of all foreign-born workers in the United States that range between:

Accepted Answer

A)  0.3 and 0.6. 
B)  -3.0 and -7.8. 
C)  -4.0 and -8.1. 
D)  -25.0 and -10.0.

Question 18

Suppose that FDI has "spillover" benefits for the recipient nation (such as spurring technological innovation, more FDI, or growth in labor productivity). These spillover effects might help explain why:

Accepted Answer

A)  in Singapore, wages fell in the short run. 
B)  in Singapore, wages fell and returns to capital rose in the long run. 
C)  in Singapore, wages rose and, depending on the calculation used, returns to capital were close to original levels in the long run, which contradicted the Heckscher-Ohlin model. 
D)  in Singapore, absolutely nothing changed in either the short or the long run.

Question 19

Does the European Union allow migration among its member countries?

Accepted Answer

The answer of Does the European Union allow migration among...

Question 20

In the long run, which of the following explains why there are no changes to returns to capital and wages when FDI or labor immigration occurs?

Accepted Answer

A)  World prices of output are unchanged. 
B)  Marginal productivities are unchanged. 
C)  There is no change in the capital-labor ratio in either industry. 
D)  World prices of output and marginal productivities are unchanged.

Exam 5: Movement of Labor and Capital Between Countries