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ECON 113 TRAT 4: Black Markets and ImmigrationThe decline in American union membership over the past 40 years can mostly be contributed to:Anti-globalization Outsourcing US laws being less friendly to the formation of unions than such laws in other countries Export CompetitionNone of the aboveIs it smart for the government to protect industries that are new? Yes, it promotes a healthy domestic economy. No, it is difficult for the government to determine which industries will eventually be able to competeNo, if a firm will be profitable in the long run, it should be willing to incur temporary losses.Yes, rich countries today protected their industries when they were developing. B and C.How can the negative effects of immigration on the wages of low-skilled workers be balanced out in an economy?By encouraging immigration of high-skilled workersBy stopping immigration because it hurts the economy By letting all immigrants enter the labor marketBy outsourcing all production.By limiting the amount of high-skilled immigrants.Suppose the U.S. decides to have open borders allowing workers to immigrate freely without restriction. Of these workers, many are low skilled. In this scenario, who are the winners and losers? U.S. firms that hire low-skilled workers lose and domestic low-skilled workers winThe labor market is unaffected by immigration Both U.S. firms that hire low-skilled workers and domestic low-skilled workers lose.Both U.S. firms that hire low-skilled workers and domestic low-skilled workers win. U.S. firms that hire low-skilled workers win and domestic low-skilled workers lose.Are the effects of immigration on the wages of low-skilled workers relatively large or small in the U.S. economy?It is difficult to say because of the large number of illegal immigrants that may work below minimum wage but for whom we lack accurate data. Small because the legal floor of federal and state minimum wage laws maintains higher wages.Small because Immigrants stimulate the local low-skilled labor market through increased demand for local goods/services.Large because of the high number of immigrants and the shifting of firms towards less labor-intensive production processes None of the above. In 2014, General John F. Kelly said that he has inadequate resources to stop the practice of drug trafficking from Latin America to the U.S.; he can only stop 20% of the drugs smuggled through. However, he argued that if he has more ships, at least 16, as base for helicopters, he can reach the goal of stopping 40% of drugs from going into the U.S. Should the government spend more money to continue expanding this prohibitionist strategy?The government should fund this prohibitionist act. It’s the only effective way in cracking down the drug market.The government should weigh the economic impact of stopping 40% of drugs versus the costs of more ships and make a rational choice based on the impact of restricting supply on price and quantityThe government should not fund this. If they continue to crack down on drugs transported by ships, cartels will find a different way, like catapulting drugs over the borderThe government should not fund this anymore. It is way too much money for just an additional 20% of drugs seizedThe government should just keep funding the same amount of money because the cost is too much comparing to the benefits?It is said that black markets thrive in places where taxes are low, poverty is high, and resources are scarce. Why is this the case?The large differences in living standards create major benefits to poor people in developing countries from participating in black markets with rich buyers to trade scarce resourcesPoverty results from unemployment, which motivate people to search for high paying jobs even if they’re illegalScarce and illegal resources lead to high demand and high prices, but with government intervention they can only trade in the black marketThese places are where most illegal activities happen, and illegal goods can only be traded in the black marketThis statement is false. One of the reasons for the existence of black market is tax evasion. If taxes are low, there is no need to do transactions illegallyWhat are the likely impacts on society of black markets for streaming movies? (hint: what has been the impact from such markets for music?)Consumers will wait till the movies are available for free instead of paying to go see the movies in the theaters. Both theaters and producers will lose out on revenues and go out of business. Producers will limit the number of movies made due to loss in profitsMore people consume the entertainment, increasing the overall entertainment market and undermining the market power and profit of studios.The economy will benefit because now consumers will spend money on something else more beneficial than seeing moviesNone of the aboveIn theory, a black market is quite efficient. Without government intervention, the market can regulate itself, and both buyers and sellers benefit from these transactions. What are the negative consequences that a black market might bring?It is not efficient because they are still making profits; the consumers are still losing outIt results in loss of tax revenue, leading to poor government services due to lack of resourcesThere’s none. The market it quite efficient, it’s just immoral that they are selling kidneys and illegal drugs.Markets are efficient only if they remain competitive; cartels may form and gain market power through violence, resulting in increases in crime and exploitationNone of the aboveThe sale of illegal drugs such as marijuana is a major part of the black market, but some states have taken the initiative to legalize marijuana’s recreational use. Suppose one such state, Washington, provides a subsidy to its marijuana growers that allows them to grow marijuana at a cheaper price. The legal marijuana growers then sell their product to the legal marijuana sellers, who then sell the marijuana at a lower price than the sellers in the black market. As a result the total revenue of black market marijuana would:IncreaseStay the sameNot possible to answer with given informationFirst increase but then decreaseDecrease KEY:1.C2.E3.A4.E5.A6.B7.A8.C9.D10.E ................
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