US law was recently changed so that some airplane manufacturers are immune from liability from accidents involving their decades old aircraft, laying all the responsibility on the pilots. As a result
a. accident rates fell due to less adverse selection
b. accident rates fell due to less moral hazard
c. accident rates rose due to less adverse selection
d. accident rates rose due to less moral hazard
b
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Game theory is not useful in understanding perfect competition because in a perfectly competitive market:
A. there are too many firms to be able to model their behavior accurately using game theory. B. the payoffs to firms' choices are unknown. C. each firm only cares about its own profit, so there is no interdependence. D. no single firm can influence the market price, so firms' decisions are not interdependent.
When economists refer to "the invisible hand," what do they mean?
What will be an ideal response?
Because low tariffs have a high ratio of benefits to costs, they are an especially efficient way for nations to achieve full employment and growth
Indicate whether the statement is true or false
The Coase theorem states that
A. positive externalities are directly related to the weather-the better the weather, the more positive externalities. B. in the case of trivial or zero transaction costs, negative externalities are more likely to appear. C. when transaction costs are high, positive externalities will be minimized. D. in the case of trivial or zero transaction costs, the property rights assignment does not matter to the resource-allocative outcome.