A game-theory explanation of the paradox that even though all countries would benefit if each chose free trade, in fact each tends to follow protectionist policies is
A) trade war.
B) collective action.
C) prisoner's dilemma.
D) benefit-cost analysis.
E) rent seeking.
C
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What does a current account deficit do that is positive for a nation?
What will be an ideal response?
It is advisable to use clustered standard errors in panel regressions because
A) without clustered standard errors, the OLS estimator is biased B) hypothesis testing can proceed in a standard way even if there are few entities (n is small) C) they are easier to calculate than homoskedasticity-only standard errors D) the fixed effects estimator is asymptotically normally distributed when n is large
Economics is a social science that primarily explores how: a. businesses market products under competitive conditions
b. stock and bond prices fluctuate when there are changes in demand or supply. c. the government allocates its budget among competing political interests. d. goods and services are consumed, produced and distributed in a world with limited resources.
In the above figure, if the price is P1, the firm maximizes its profit by producing
A) nothing. B) where MC equals ATC. C) where MC equals P1. D) where ATC equals P1.