In the text, the authors present evidence that the market for free agents in professional baseball is subject to the lemons problem. How could a prospective free agent overcome this problem when seeking a new contract?
A) Agree to accept a lower salary with a new team.
B) Rely on standardization to avoid the asymmetric information problem.
C) Decide to negotiate only with their current team.
D) Develop a reputation as a reliable and productive player.
D
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A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run. But the firm can stave off competition and continue to earn economic profits if
A) it can lobby the government to establish a price floor for its product. B) it can find new ways to differentiate its product. C) it can move to another country where there is less competition. D) it can successfully sue its competitors for copyright infringement.
The Gulf Cartel and Sinaloa Cartel are the two major cartels in illegal drug trade in Mexico. Although, each of these cartels are better off sharing the market, they have an incentive to try to take the entire market. In which of the following ways is cheating among these cartel members dealt with in this region?
a. Through government taxation policy b. Through legally enforceable contracts c. Through restrictions on the supply of inputs used by the firms d. Through output quota and price ceiling e. Through violence and drug wars
It has been generally observed that most trade in the world occurs between a developed and a less-developed nation rather than between industrial or developed nations
a. True b. False Indicate whether the statement is true or false
The value to the consumer is
A. the area under the demand curve but above the price line from the origin to the quantity purchased. B. the area under the supply curve from the origin to the quantity produced. C. the area under the supply curve but below the price line from the origin to the quantity purchased. D. the area under the demand curve from the origin to the quantity purchased.