Most t-shirts bought by Americans are made in Asia. As a result of free trade, the production of t-shirts in America
A) has increased.
B) has stayed the same.
C) has decreased.
D) has been taken over by the government.
E) might change, but more information about what else the United States imports is needed to determine if U.S. production increased, decreased, or did not change.
C
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Assume that you have heard news that a local radio station is hosting a luncheon at your school by offering hot dogs, chips and cola at no expense to the student body. Why would economists say that this lunch is not truly free?
What will be an ideal response?
Refer to Table 14-4. How are the firms in this advertising game caught in a prisoner's dilemma?
A) They are not in a prisoner's dilemma because there is one clear strategy for each. B) They would be more profitable if they refrained from advertising but each fears that if it does not advertise, it will lose customers. C) Only the first mover is caught in a prisoner's dilemma because the second has a chance to observe and respond. D) Since each firm is uncertain about the other's behavior, each will adopt a wait-and-see attitude which results in no increase in market share and no new customers.