In a production process, an excessive amount of the variable input relative to the fixed input is being used to produce the desired output. This statement is true for:

Trade diversion is one reason that some economists:

a. believe we should not even other to promote free trade. b. recommend we change our focus from regional trade agreements to the WTO, a multilateral trade agreement. c. recommend we reinstate some tariffs that were actually beneficial to all nations. d. think we should exclude low-wage nations from trade agreements.

Moral hazard exists chiefly because of

A) economies of scale. B) diseconomies of scale. C) private information. D) public information.