The voluntary export restraints on autos by Japan in the early 1980s were:
A. prohibited under the GATT treaty.
B. probably approved of by the Japanese car companies since it increased their profits.
C. unlike a tariff and did not affect the price of imports.
D. unlike an import quota and did not affect the quantity of cars imported.
Answer: B
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When an insurance company specifies certain precautions that an insured person must take it is trying to control for moral hazard.
Answer the following statement true (T) or false (F)
From 1970 to 1998 the U.S. dollar
a. gained value compared to the German mark because inflation was higher in the U.S. b. gained value compared to the German mark because inflation was lower in the U.S. c. lost value compared to the German mark because inflation was higher in the U.S. d. lost value compared to the German mark because inflation was lower in the U.S.
Under deferred compensation packages,
A) a moral hazard occurs if a firms fires a good worker before the worker receives her deferred compensation. B) a moral hazard occurs if workers decide not to shirk so as to receive the deferred compensation. C) moral hazards are avoided. D) workers' wages are below their marginal revenue product as they near retirement.
If the golfers at Green Golf have nonidentical demands, the profit-maximizing user fee is ________ Green Golf's marginal cost.
A) one-half of B) less than C) equal to D) greater than