Voluntary restraint agreements are
A. a type of tariff in which the tax is a fixed amount per unit of good imported.
B. a type of quota that actually benefits the firms facing the restrictions.
C. a type of tariff in which the tax is based on the value of the good.
D. a type of quota agreed to "voluntarily" in order to prevent more severe protection of another type.
Answer: D
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The price effect is equal to the
A) substitution effect. B) substitution effect plus the income effect. C) marginal rate of substitution minus relative prices. D) substitution effect minus the income effect.
An example of moral hazard is
a. workers working diligently even though the boss is not looking b. health care insured employees forgoing their diet and exercise c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds exactly as the bank requires
Evidence from a study of the market for baseball players using 1960s data
a. indicated that sports with strong player associations are unlikely to experience wage discrimination. b. suggested that government regulation had eliminated most evidence of wage discrimination. c. found some evidence of consumer-driven wage discrimination. d. found that measurement of marginal productivity was very difficult for baseball players.
Suppose that opportunity costs are constant and that Gorge can either bake a maximum of six pies or three cakes in a day. Brandi can produce a maximum of eight pies or two cakes in a day. Gorge has an comparative advantage in the production of
A. cakes. B. pies. C. both cakes and pies. D. neither cakes nor pies.