Question 5: The approach by Borjas (2003) on evaluating the effects on immigration ignores: (a) Cross-wage effects. (b)

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Question 5:
The approach by Borjas (2003) on evaluating the effects on immigration ignores:
(a) Cross-wage effects.
(b) Real-wage effects.
(c) Efficiency-wage effects.
(d) Own-wage effects.
(2 marks)
QUESTION 6.
Consider two countries: South Korea and New Zealand and two goods: Lamb and Air Pumps. South Korea
imports $210 million worth of lamb from New Zealand and exports $10 million worth of lamb to New Zealand.
On the other hand, New Zealand imports $60 million worth of air pumps from South Korea and exports $20
million worth of air pumps to South Korea. What is the inter-industry trade measure between these two countries?
(a) 2/3.
(b) 1/5.
(c) 4/5.
(d) 1/3.
QUESTION 7.
Let the fixed cost for production of a good, F, be equal to $2,700; the labour requirement to produce one unit, a,
be equal to 2 hours and the wage rate, w, be $25 per hour. Let Q stand for the number of units of output. The unit
cost when Q = 1 is ________, and when Q = 3 is________:
(a) $2,750 and $900.
(b) $2,750 and $1,050.
(c) $2,750 and $1400.
(d) $2,750 and $950.
(2 marks)
QUESTION 8.
A country will choose to protect an industry to promote future comparative advantage instead of exploiting its
current comparative advantage when:
(a) The interest rate is high.
(b) Time horizon of decision-making is long.
(c) There are fixed cost in technology investments.
(d) The growth rate of expertise is low.