A radio story reported a study on the makes and models of cars that were observed going through intersections in the Washington, D.C. area without stopping at the stop signs. According to the story, Volvos were heavily overrepresented; the fraction of cars running stop signs that were Volvos was much greater than the fraction of Volvos in the total population of cars in the D.C. area. This is
initially surprising because Volvo has built a reputation as an especially safe car that appeals to sensible, safety-conscious drivers. How is this observation best explained?
a. Volvo drivers are not willing to take risks that they would take in another, less safe car. Driving a Volvo leads to a propensity to run stop signs.
b. Volvo drivers are not willing to take risks that they would take in another, less safe car. Driving a Volvo reduces the propensity to run stop signs.
c. Volvo drivers are willing to take risks that they would not take in another, less safe car. Driving a Volvo reduces the propensity to run stop signs.
d. Volvo drivers are willing to take risks that they would not take in another, less safe car. Driving a Volvo leads to a propensity to run stop signs.
d
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Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
Featherbedding allows unions to increase wages by:
a. limiting the supply of labor. b. increasing firms' demand for labor. c. forcing firms to accept higher-than-equilibrium wages. d. reducing labor share of payroll taxes.
Which of the following is true? a. A nation cannot have a comparative advantage in the production of every good
b. A nation cannot have an absolute advantage in the production of every good. c. A nation can have a comparative advantage in the production of every good, but not an absolute advantage. d. A nation can have a comparative advantage in the production of a good only if it also has an absolute advantage.
Trade allows a country to consume outside its production possibilities frontier
a. True b. False Indicate whether the statement is true or false