In the area of agricultural chemicals, the Environmental Protection Agency requires detailed labeling on cans of pesticides and herbicides. Generally speaking, the industry not only doesn't oppose these labeling requirements, but even supports government-sponsored education programs on how to use these chemicals. Why?
What will be an ideal response?
Government-sponsored education programs about the proper use of pesticides and herbicides reduce the costs for consumers to use these products. Better knowledge about the proper use of these products acts to increase the demand for these goods. Greater demand creates more value for consumers, and the chemical companies can capture some of this greater value in the form of higher profits. These programs may also reduce producer-borne transaction costs stemming from lawsuits that may arise from improper use.
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A cartel member has the incentive to cheat on the cartel agreement because
a. it fears that other members may also cheat on the agreement. b. the cartel prevents the member from charging the monopoly price. c. undercutting the cartel price will increase the cartel member's profit. d. the cartel outcome is not Pareto optimal for the cartel members.
The time needed for changes in monetary of fiscal policy to affect the economy is called the ________ ________
a. Recognition Lag b. Decision-Making Lag c. Implementation Lag d. Effectiveness Lag
Countries tend to use the labor processes that ______.
a. they have had the longest b. take advantage of their most plentiful resources c. utilize their most expensive resources d. rely on their most scarce resources
Table 21.2Output (units per day)0102030Total cost (dollars per day)$40$54$62$80Above 10 units of output, the average fixed cost in Table 21.2
A. Rises above $2.00. B. Remains constant. C. Continues to decline. D. Stays below $0.50.