An example of a quota is a:
A) limit on the total number of Honda automobiles imported from Japan.
B) regulation specifying that each imported Honda automobile must meet certain emission exhaust guidelines.
C) tax of 10 percent of the value of each Honda automobile imported from Japan.
D) subsidy from the Japanese government of $500 for each Honda automobile imported into the United States.
Ans: A) limit on the total number of Honda automobiles imported from Japan.
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The key economic difference between expected utility and expected value is that
A) expected value only considers the value of outcomes, whereas expected utility considers the tradeoff between value and risk. B) expected utility only considers the value of outcomes, whereas expected value considers the tradeoff between value and risk. C) expected utility is the maximum value obtained, whereas expect value is the mean of the values from a set of possible outcomes. D) None of the above—the differences are mathematical not economic.
Under oligopoly, if one firm in an industry significantly increases advertising expenditures to capture a greater market share, it is most likely that other firms in that industry will
A. pursue a strategy to reduce advertising expenditures to maintain profits. B. decide to increase advertising expenditures even if it means a reduction in profits. C. increase the price of the product to improve profits and then increase advertising expenditures. D. make no changes in advertising expenditures because advertising is effective in the short run, but not the long run.