Suppose that two poker players believe that they are superior players to the rest of the people at their table. Further suppose that the two players make an agreement to concede hands to each other in order to drive the other players from the game first. Economists would model such behavior as

Suppose you work for a government agency that is considering removing certain agricultural subsidies. The removal of these subsidies will increase the price, thus lowering consumers' welfare

Because only aggregate market data is available, you are unable to measure the exact values for the compensated and equivalent variation by consumer. However, you are able to estimate the change in market consumer surplus. Assuming agricultural products are normal goods, how does your estimate of consumer surplus compare to the unknown EV and CV? Explain. Under what conditions will the three measures of welfare be close to one another?

Which of the following is the best example of a voluntary export restraint?

A) a limit set by the Japanese government on the number of sports utility vehicles that the United States can import from Japan B) a subsidy granted by the U.S. government to domestic sports utility vehicle manufacturers so they can compete more effectively with foreign sports utility vehicle manufacturers C) a tax placed on all sports utility vehicles sold in the domestic market D) a $5,000 per-car fee imposed on all sports utility vehicles imported into the United States