The estimated cost of automobile jobs saved due to limitations on foreign autos is $105,000 per job. Why is there a cost to saving jobs through protectionism?
When foreign cars are limited, consumers pay more for cars. In addition, the United States devotes too many resources to car production instead of more resources being transferred to where workers would be most productive.
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Assume the government reduces your welfare check by $1 for every $2 that you earn on the job while on welfare. How will this tax affect your labor supply decisions? What is the implicit tax rate of such a policy?
What will be an ideal response?
The industrial organization economics perspective assumes that the industry _____________ is the most important determinant of long-run profitability
a. Structure b. Conduct c. Performance d. None of the above
When retail bicycle dealers advertise and perform warranty repairs but do not deliver the personal selling message that Schwinn has designed as part of the marketing plan but cannot observe at less than prohibitive cost, the manufacturer has encountered a problem of ____
a. reliance relationships b. uncertainty c. moral hazard d. creative ingenuity e. insurance reliance
Cartels are difficult to maintain because
a. antitrust laws are difficult to enforce. b. cartel agreements are conducive to monopoly outcomes. c. there is always tension between cooperation and self-interest in a cartel. d. firms pay little attention to the decisions made by other firms.