The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium price of chocolate
a. increases, and producer surplus increases.
b. increases, and producer surplus decreases.
c. decreases, and producer surplus increases.
d. decreases, and producer surplus decreases.
d
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Suppose country X can produce a personal computer at an opportunity cost of 1000 t-shirts. Assume that country X has a comparative advantage in the production of t-shirts
Would country X ever agree to terms of trade with country Y such that one personal computer would be exchanged for 1100 t-shirts?
A key difficulty facing insurance companies is that people know more about their health than do insurance companies, and that those people who are seriously ill are the most likely to want to obtain health insurance
What is this phenomenon called? A) asymmetric information B) moral hazard C) economic irrationality D) adverse selection
Which of the following statements represents a key point about strategic decision making?
A) Strategy is less important in nonconstant sum games than in constant sum games. B) The payoffs in cooperative games will always be higher than in noncooperative games. C) It is essential to understand your opponent's point of view and to deduce his or her likely responses to your actions. D) Optimal strategies in cooperative games always lead to economically efficient outcomes.
The community of Desertville traditionally produces a large number of tires and a small amount of kiwi fruit. Kiwis are becoming increasingly popular, and Desertville has decided to expand kiwi cultivation and decrease tire manufacturing. According to the law of increasing cost,
a) the cost of producing tire will decrease while the cost of producing kiwis will increase b) the cost of producing kiwis will increase c) the cost of producing tires will decrease d) the cost of producing kiwis will decrease while the cost of producing tires will increase