Farm programs such as those of the United States and the European Union cause a misallocation of international agricultural resources primarily because:
A. they distort domestic and world agricultural prices.
B. they inhibit technological progress in agriculture.
C. production and trade occur on the basis of comparative advantage.
D. price supports are set below market-clearing levels.
Answer: A
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Which of the following would result in a higher real wage rate and a greater level of employment in the United States?
A) an increase in the supply of capital in the United States B) more liberal U.S. immigration policies C) an increase in the U.S. population D) all of the above
Adkins Air is the only seller offering service directly from Milwaukee to Greensboro. The market is contestable. Thus the Nash Equilibrium for a game between Adkins Air and a potential entrant is when the potential entrant
A) enters and Adkins earns a normal profit. B) enters and Adkins earns an economic profit. C) does not enter and Adkins earns a normal profit. D) does not enter and Adkins earns an economic profit.