When having a choice of which estimator to use with a binary dependent variable, use
A) probit or logit depending on which method is easiest to use in the software package at hand.
B) probit for extreme values of X and the linear probability model for values in between.
C) OLS (linear probability model) since it is easier to interpret.
D) the estimation method which results in estimates closest to your prior expectations.
Answer: A
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Under the cartel, the individual firm's quantity is (assuming that it wants to cheat on its quota) 
Figure 42.2
A. Q1. B. Q2. C. Q3. D. Qb.
A proprietorship is a firm with
A) two or more owners who both have unlimited liability. B) a single owner who has limited liability. C) a single owner who has unlimited liability. D) many owner all of whom have limited liability.
Japan and China can both produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will a. import guns
b. have a comparative advantage in guns. c. have an absolute advantage in guns. d. have a comparative advantage in rice.
All of the following are examples of demand shocks, except one. Which is the exception?
a. A spontaneous decrease in money demand b. A tax increase c. A contraction of the money supply by the Fed d. An increase in the price level e. A reduction in government spending