For the following trade relationship, explain the likely source of the comparative advantage of each of the exporting countries. a. The United States exports airplanes to China, and China exports clothing to the United States. It is cheaper to produce airplanes using many highly skilled workers, and it is cheaper to produce clothing using many unskilled workers. The United States has a more highly skilled labor force than China has. b. The United States is a pioneer in heavier-than-air flight and has continued to commit significant resources to producing airplanes. China has extended its historical dominance in silk to other textiles and established itself as the global leader in textiles. c. China has an absolute advantage in the the production of clothing, and the United States has an absolute advantage in the production of airplanes. d. The United States needs more airplanes than China. The United States produces large quantities of planes and winds up selling some abroad. China, the most populous nation on earth, needs large quantities of clothing. It produces large quantities of clothing and winds up selling some abroad.

Minneapolis federal reserve bank economist edward prescott estimates the elasticity of the u.s. labor supply to be 3. given this elasticity, what would be the impact of funding the social security program with tax increases on the number of hours worked and on the amount of taxes collected to fund social security?

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

Tom has brought $150,000 from his pension to a new job where his employer will match 401(k) contributions dollar for dollar. each year he contributes $3,000. after seven years, how much money would tom have in his 401(k)?