Suppose maple syrup is illegal in the country of Pancake. If there are two ways to smuggle maple syrup into Pancake: one through overland and one by sea. If the proud Pancakian coast guard is able to arrest all who attempt to smuggle syrup by sea, what would the theory of rent predict?
A. The production costs of smuggling syrup by sea will fall to zero as the use of the sea route falls to zero.
B. The increased rents to maple syrup will reduce demand for maple syrup.
C. Rents for using the land route will increase, making syrup smugglers on net better off.
D. Rents for using the land route will increase, but syrup smugglers on net will likely not be better off.
Answer: D
You might also like to view...
The long-run average cost curve indicates
a. the lowest average costs of production at each level of output. b. the lowest average costs of production for each plant size. c. the lowest point along each of the firm’s short-run average total cost curves. d. the lowest point along each of the firm’s short-run marginal cost curves.
Which of the following is an example of money illusion?
A) An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 5 percent. B) An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 20 percent. C) An individual will neither increase nor decrease the number of hours she is willing to work when the nominal wage rises by 10 percent and the overall price level rises by 10 percent. D) none of the above
Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, the market clearing price ________ and the equilibrium quantity ________
A) definitely falls, is indeterminate B) is indeterminate, definitely falls C) definitely falls, definitely rises D) definitely rises, is indeterminate
By being responsible for their actions
A) moral hazard becomes asymmetric information. B) employees are being given a property right. C) employees find it easier to free ride on the performance of others. D) the stock market is selling the claims of agents.