If the value of a cable TV franchise is uncertain, too much may be bid for the franchise. This is an example of
a. moral hazard
b. an authority relation
c. the winner's curse
d. the principal-agent problem
e. adverse selection
C
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Assume that average labor productivity is the same in each country. Based on the information in the table, which country has the highest real GDP per capita?CountryPopulation (millions)Share of Population Employed (%)A10060B15055C7550D25045E9540
A. Country A B. Country B C. Country C D. Country D
Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel. If the price of diesel fuel falls, there is
A) an increase in the supply of home heating oil. B) a decrease in the supply of home heating oil. C) an increase in the quantity of home heating oil supplied. D) a decrease in the quantity of home heating oil supplied. E) an increase in the demand for home heating oil.
The Walt Disney Company is in a position to use a two-part tariff policy in setting prices for admission and rides at Disney World. If this strategy resulted in maximum profit, Disney would convert all consumer surplus into profit
Which of the following explains why Disney does not maximize its profits from admission and rides? A) Disney purposely charges less than the profit-maximizing price for admission to Disney World because it does not want to risk alienating its customers. B) To maximize its profits, Disney would have to know the demand curves of each of its customers. Since this is not possible, Disney is not able to convert all consumer surplus into profit. C) Disney purposely charges less than the profit-maximizing price for admission to Disney World in order to earn more profit from sales of food, lodging, and other related services. D) Disney does not charge the profit-maximizing price for admission because it wants to keep admission affordable for children who will be more likely to visit Disney World when they become parents.
Explain how it is possible for one of two people in a two-good economy to have an absolute advantage in producing both goods, but trade can still benefit both people
What will be an ideal response?