What is one reason "micro-managers" might be less successful than so-called "delegators"?
A) Delegators are smarter.
B) Delegators enjoy increasing returns to scale.
C) Micro-managers suffer decreasing returns to scale.
D) Micro-managers have constant returns to scale.
C
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In an attempt to reduce the poverty rate, there has recently been a movement away from income maintenance programs to
A) Supplemental Security Income programs. B) reducing the age a person can retire at. C) encouraging people to get jobs. D) incorporating the Lorenz policy in decisions.
To reduce cyclical unemployment the government might:
a) Increase the budget surplus b) Increase the balance of payments deficit c) Increase the budget deficit d) Reduce government expenditure
The optimal quantity of a negative externality is zero if:
A. it is costly for people to negotiate with each other. B. it imposes a high enough cost on society. C. the marginal cost of reducing the externality is zero. D. the majority of voters decide to eliminate the externality.
Hollywoodland, being self-sufficient in most products, trades only two goods with the Rest of the World (ROW), movies and automobiles. Both of these goods are produced using skilled labor (L) and capital (K) with the returns to capital being the interest rate (r) and the returns to skilled labor being the wage rate (w). The production of automobiles is capital intensive relative to the production of movies, and Hollywoodland is skilled-labor abundant relative to the ROW.a. State the Heckscher-Ohlin theorem and use it to predict the pattern of trade between Hollywoodland and the ROW.b. If the price of Hollywoodland's imports rises, while the price of its exports remain unchanged, what would happen to the factor returns in Hollywoodland in the long run? State the theorem used to explain
the answer, and briefly state the intuition behind the theorem. What will be an ideal response?