The Gulf Cartel and Sinaloa Cartel are the two major cartels in illegal drug trade in Mexico. Although, each of these cartels are better off sharing the market, they have an incentive to try to take the entire market. In which of the following ways is cheating among these cartel members dealt with in this region?
a. Through government taxation policy
b. Through legally enforceable contracts
c. Through restrictions on the supply of inputs used by the firms
d. Through output quota and price ceiling
e. Through violence and drug wars
e
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A chain saw manufacturer can make its chain saws safer by adding a titanium chain guard to its products. Adding the titanium chain guard costs $35 per chain saw
The manufacturer estimates that this will prevent 10 injuries for every 5,000 chain saws sold and that, on average, each injury causes $15,000 of harm. The injury cost per chain saw is A) $3.00. B) $30.00. C) $37.50. D) $40.00.
Assume the price of Levi jeans increases. As a result, you decrease the quantity of Levi jeans purchased each month and purchase more Lee jeans. This is an example of the:
a. consumption effect. b. utility effect. c. income effect. d. substitution effect.