Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes
Consumers use personal preferences when they make purchases. In this case, US consumers prefer other sports such as baseball, basketball, or football over soccer. Although over time we would expect a movement together in compensations for athletes in different sports, the discriminatory preferences of consumers allow the gap to persist over time.
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Which of the following is an example of rent seeking behavior?
A) Recent increases in cigarette taxes faced little opposition from voters, many of whom were rationally ignorant with respect to the tax. B) U.S. sugar firms convinced Congress to impose a quota on imports of sugar. C) Amazon introduced the Kindle to compete with Sony's Digital Reader. Amazon was motivated by the desire to earn profits from the Kindle but also increased the choice of digital music players available to consumers. D) Apple earned large profits from the development and sale of the iPhone.
An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without b. people drive as safely with more airbags as without c. football players avoid 'spearing' with their heads even with safer helmets d. people fail to read the medicine warnings more often when self-medicating versus with a doctor's prescription
Which of the following is a unique provision of NAFTA?
A) tariff elimination B) common currency C) environmental standards D) immigration oversights and policies
Entry barriers mean a true monopoly ______.
a. has many firms b. has only one firm c. welcomes many firms d. requires varied products