People who call for creating a "level playing field" believe that:
a. a country with relatively low wages is typically a country with an abundance of low-skilled labor.
b. trading on the basis of comparative advantage benefits both domestic and foreign firms.
c. creating a "level playing field" undermines the basis for specialization and economic efficiency.
d. production in accordance with comparative advantage is unfair.
e. free trade allocates the scarce resources in an efficient way.
d
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A) creates moral hazard but eliminates adverse selection. B) creates adverse selection but eliminates moral hazard. C) creates both moral hazard and adverse selection. D) eliminates both moral hazard and adverse selection.
The difference between the pretax and posttax return to an economic activity is known as the
A) tax multiplier. B) net tax. C) tax burden. D) tax wedge.