A holdup problem occurs
A) when a financial institution undertakes too little investment in security.
B) when one firm must make a specific investment and a second firm takes advantage of it.
C) if the firm that moves second in a Stackelberg game chooses the incorrect output level.
D) if you are entering into a contract with a government entity.
B
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Which of the following is NOT a consequence of the introduction of the Medicare program?
A) an increased quantity of medical services demanded B) an increased ability for the elderly to obtain medical services C) an increased ability for the poor to obtain medical services D) a reduced demand for medical services
Production efficiency exists when the least cost combination of inputs is used to produce output
a. True b. False
"New industries should be protected from older established foreign competitors until they are mature enough to compete on an equal basis." This argument for trade restrictions is called the __________ argument
A) low-foreign-wages B) foreign export-subsidies C) anti-dumping D) infant-industry
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The workers in Country B will benefit from trade if they:
A. specialize in bananas because they have an absolute advantage in banana production. B. specialize in tomatoes because their opportunity cost of tomatoes is higher than Country A's. C. specialize in tomatoes because their opportunity cost of tomatoes is lower than Country A's. D. specialize in bananas because they have a comparative advantage in banana production.