What do trade policies do to the standard of living?
Trade policies reduce both imports and exports. While they leave the trade balance unchanged, they reduce trade overall and so reduce the gains from trade. This lowers the standard of living. U.S. industries that produce goods on which imports are reduced may gain, but overall there is a loss.
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According to the capture hypothesis of regulation
A) regulation favors producers over consumers because the producers were able to pay off the regulators. B) regulation eventually favors producers over consumers because the producers have more at stake than individual consumers. C) regulation benefits the regulators and the legislators who support the regulation by enabling them to obtain favors from both producers and consumers. D) regulation benefits the consumers over producers because the number of consumers is greater than the number of producers, giving the consumers more political clout.
Which of the following features is associated with imperfect competition?
a. Homogeneity of products b. Positive economic profits c. Freedom of entry and exit d. Large number of firms
Partial equilibrium analysis is the process of examining the equilibrium conditions for households and firms combined for more than one but not all individual markets.
Answer the following statement true (T) or false (F)
In the Prisoners' Dilemma game,
a. the Nash equilibrium is the only outcome that is not Pareto optimal. b. neither player has a dominant strategy. c. the Stackelberg equilibrium will be Pareto optimal if the game is played sequentially. d. all possible outcomes are Nash equilibria.