Refer to the diagram pertaining to two nations and a specific product. In equilibrium, the nation represented by lines FA and FC will:
A. export H to the country represented by lines GB and GD.
B. import H from the country represented by lines GB and GD.
C. pay price F for its imports.
D. receive price G for its exports.
B. import H from the country represented by lines GB and GD.
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If laundry detergent companies are in an agreement, this is an example of a ________ agreement.
A) treble B) vertical C) horizontal D) triple-threat
In the economic literature on principal-agent problems, the ________ is the person who takes some action, and the ________ is the person whom the action affects
A) agent, principal B) principal, agent C) Both statements describe the agent. D) Both statements describe the principal.
An example of statistical discrimination would be:
A. assuming the food will be better at an Italian restaurant than a Chinese one in the Little Italy neighborhood of NYC. B. charging young drivers a higher premium than older drivers. C. charging homes near a lake higher premiums for flood insurance than those on a hill. D. All of these are examples of statistical discrimination.
Suppose that a normal rate of return in the economy is 10% and the rate of return being earned by firms in a competitive industry equals exactly 10%. Which of the following is a correct prediction based on this information?
A. Firms in the industry will not undertake any investment projects other than to replace depreciating capital stock. B. New firms will want to enter this industry, as the existing firms are earning an economic profit. C. The industry size will contract. D. Firms already in the industry will want to expand to try to increase their rate of return.