The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted.
Which of the following correctly identifies the net change in national welfare due to the provision of the export subsidy by the domestic government?
A. The net loss in well-being for the exporting country is area (b + d).
B. The net gain in well-being for the exporting country is area (b + d + f + g + i +j).
C. The net loss in well-being for the exporting country is area (b + d + f + g + h + i + j).
D. The net gain in well-being for the exporting country is area c.
Answer: C
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In a two-player simultaneous game where neither player has a dominant strategy,
A) there is never a Nash equilibrium. B) there is only one Nash equilibrium. C) the actual outcome is unpredictable. D) the actual outcome will not be a Nash equilibrium.
The data in the tables below suggest that production in:
Autos and chemicals are in million of units in the following production possibilities tables:
A. Germany is subject to increasing opportunity costs and the United States to constant opportunity costs
B. The United States is subject to increasing opportunity costs and Germany to constant opportunity costs
C. Both Germany and the United States are subject to constant opportunity costs
D. Both Germany and the United States are subject to increasing opportunity costs