Final Exam Econ 101 2023

Final Exam Econ 101 2023 What behavior does the phenomenon known as comparative advantage encourage? specialization in production The government has been trying to encourage the use of fuel-efficient cars. One way it does this is by allowing fuel-efficient cars to use a separate highway lane. This separate lane encourages people to use fuel-efficient cars because those who place a high value on their scarce time may be encouraged to buy a fuel-efficient car to take advantage of the separate highway lane. An individual worker is laid off because his firm is in financial trouble. Why would this event be of more interest to a microeconomist than to a macroeconomist? An event involving just one worker and one firm is a microscale event. Although government-sponsored flood insurance can help those who experience flood damage through no fault of their own, it can also increase the likelihood that people will build new homes where the risk of flooding is high. With these people, the insurance functions as a(n) indirect incentive. Economics professors are well aware of the importance of incentives. Which of the following situations illustrates the use of a positive incentive? Students can choose to get a higher grade by doing extra credit work. If Bo and Kenzi were to specialize and trade, at what exchange rate would they find some quantity of trade to be mutually beneficial?