ECN 212 - Exam 3
1. A tax imposed on the sellers of a good will: raise the price buyers pay and lower the effective
price sellers receive.
2. A quota is: a limit on the quantity of imports
3. Employers can try to overcome the moral-hazard problem involving their
employees by
a) better monitoring their employees' work efforts.
b) paying their employees below-equilibrium wages since the employees will
likely shirk some of their responsibilities.
c) requiring their employees to take a pre-employment work effort test.
d) paying their employees more often.: a) better monitoring their employees' work efforts.
,4. Economists use basic psychological insights in the field of study called: behav-
ioral economics
5. Trade enhances the economic well-being of a nation in the sense that
a) the gains of domestic producers of a good exceed the losses of domestic
consumers of a good, regardless of whether the nation imports or exports the
good in question.
b) both domestic producers and domestic consumers of a good become better
off with trade, regardless of whether the nation imports or exports the good in
question.
c) trade puts downward pressure on the prices of all goods.
d) trade results in an increase in total surplus compared with a closed econo-
, my.: d) trade results in an increase in total surplus compared with a closed economy.
6. A country has a comparative advantage in a product if the world price is
1. A tax imposed on the sellers of a good will: raise the price buyers pay and lower the effective
price sellers receive.
2. A quota is: a limit on the quantity of imports
3. Employers can try to overcome the moral-hazard problem involving their
employees by
a) better monitoring their employees' work efforts.
b) paying their employees below-equilibrium wages since the employees will
likely shirk some of their responsibilities.
c) requiring their employees to take a pre-employment work effort test.
d) paying their employees more often.: a) better monitoring their employees' work efforts.
,4. Economists use basic psychological insights in the field of study called: behav-
ioral economics
5. Trade enhances the economic well-being of a nation in the sense that
a) the gains of domestic producers of a good exceed the losses of domestic
consumers of a good, regardless of whether the nation imports or exports the
good in question.
b) both domestic producers and domestic consumers of a good become better
off with trade, regardless of whether the nation imports or exports the good in
question.
c) trade puts downward pressure on the prices of all goods.
d) trade results in an increase in total surplus compared with a closed econo-
, my.: d) trade results in an increase in total surplus compared with a closed economy.
6. A country has a comparative advantage in a product if the world price is
