Question 1
Figure 19-1
Refer to Figure 19-1. Which of the following would cause the change depicted in the figure above?
◦ European productivity rises relative to American productivity.
◦ Americans increase their preferences for goods produced in the EU relative to American goods.
◦ The U.S. removes a quota on wristwatches from the European Union.
◦ The price level of goods produced in the EU increases relative to the price level of goods produced in the United States.
Question 2
Figure 19-2
Refer to Figure 19-2. Which of the following would cause the change depicted in the figure above?
◦ Lack of investment in infrastructure causes U.S. productivity to fall relative to Chinese productivity.
◦ Tainted cat food from China causes U.S. consumers to decrease their preferences for Chinese goods relative to U.S. goods.
◦ A new trade agreement with China results in the United States removing all tariffs on clothing imported from China.
◦ The Chinese increase their preferences for goods produced in the United States.
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