Gains from specialization and mutually beneficial trade ________ wealth or well-being.
A. increases
B. decreases
C. dilutes
D. moderates
Answer: A
You might also like to view...
Refer to Scenario 17.4. Moral hazard arises in this situation because once the firm
A) pays the premium that is based on the .005 probability, it has no incentive to spend the additional $1000 for the flood control system, so the true probability of loss is no longer .005. B) pays the premium that is based on the .01 probability, it has no incentive to spend the additional $1000 for the flood control system, so the true probability of loss is no longer .01. C) provides for flood control, it has less incentive to spend $5000 on premiums, leaving itself underinsured. D) provides for flood control, it has less incentive to spend $10,000 on premiums, leaving itself underinsured. E) provides for flood control, it will consider that a substitute for insurance and not be able to deal with the loss from a flood should it occur.
Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers have pessimistic expectations about the used bikes in the market, what number of used bikes sold will actually be lemons (low quality)?
A. 8 B. 12 C. 16 D. 22
Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost?
A) $12 B) $10 C) $8 D) $2
Suppose that the dollar value rises from 100 to 125 yen. As a result, a. exports to Japan will likely increase
b. Japanese tourists will more likely visit the United States. c. U.S. businesses will be less likely to use Japanese shipping lines to transport their products. d. U.S. consumers will more likely buy Japanese-made automobiles.