micro ch 3
All of the following conditions will make it more likely that firms will be able to enforce a cartel agreement except
prices are not easily observed.
The ATC curve for a firm that produces an information product
slopes downward, because AVC is constant, AFC slopes downward, and ATC = AVC + AFC.
If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see
some firms entering the industry, causing the demand curves of the existing firms to shift to the left.
The greater the elasticity of demand for a final product, we find ________ the demand for the factor inputs.
the greater will be
Which of the following is NOT a characteristic of monopolistic competition?
Barriers to entry
In game theory, cooperation that continues as long as the other players continue to cooperate is known as opportunistic behavior.
False
The more it costs to enter a monopolistically competitive market, the more a firm currently in that market must worry about losing business.
False
The scope of the government's role as regulator of natural monopolies has increased with the expansion of natural monopolies in the electricity, natural gas, and telecommunications industries.
False
Which of the following is not a characteristic of a monopolistically competitive market?
Long minus run profits likely to be positive.
When firms engage in creative response to regulations, this amplifies the regulation's effects.
False
All of the following are a fundamental characteristic of oligopoly except
a homogeneous product.
All of the following are key characteristics of a monopolistically competitive industry except
a homogeneous product.
The combining of First Union National Bank and The National Bank of Memphis is an example of
a horizontal merger.
In a cartel, firms jointly act as
a monopoly firm.
A situation where a consumer's willingness to use an item depends on how many others use it is
a network effect.
Negative market feedback refers to a tendency for
a particular product to fall out of favor with additional consumers because other consumers have stopped purchasing the product.
Asymmetric information refers to a situation in which
a producer has product information that the consumer lacks.
In the 1920s and 1930s, economists became increasingly aware that there were industries that did not fit the model of perfect competition or pure monopoly. Two separate theories of monopolistic competition resulted. Edward Chamberlin of Harvard published the Theory of Monopolistic Competition in 1933. Chamberlin defined monopolistic competition as
a relatively large number of producers offering similar but differentiated products.
Which of the following is an example of an experience good?
a restaurant meal
Research into genetically modified crops has led to significant productivity gains for countries such as the United States that employ these techniques. Countries such as the European Union member nations, however, have imposed controls on the import of these products, citing concern for public health. Given the situation, the European Union's regulation of genetically modified crops is
a social regulation.
If Apple, a company that produces smartphones, purchases a company that specializes in developing phone apps, we would have an example of
a vertical merger.
Direct marketing is
advertising targeted at specific consumers.
Which of the following will lead to an increase in the firm's short-run demand for labor?
an improvement in labor productivity
What is the appropriate type of two-sided market where NYTimes.com operates as a platform firm? (Hint: In some cases, you may wish to check out the firms' Web sites to assist in answering this question.)
audience making market
Regulators usually encourage natural monopolists to engage in
average cost pricing.
A natural monopoly exists when
a firm's long-run average cost curve is sloping down when it intersects the market demand curve.
Which of the following is an example of social regulation?
clean water regulations
A tit-for-tat strategy is one in which oligopolies
cooperate as long as other members cooperate, but if anyone cheats, they cut the price until the cheater reverts to cooperation.
When an input represents a larger proportion of a firm's total costs, then
demand for the input will tends to be more elastic.
The main objective of advertising for a monopolistically competitive firm is to
differentiate its product from those of other firms and boost demand.
Enforcing a cartel agreement is
difficult because firms in the cartel have an incentive to cheat on the agreement.
Personalized advertising that uses postal mailings, phone calls, and e-mail messages is known as
direct marketing.
In the long run, in a monopolistically competitive market, price will be
equal to ATC.
It is estimated that the total annual social cost associated with satisfying federal, state, and municipal regulations in the United States
exceeds $1.75 trillion.
Local cable television companies are sometimes granted monopoly rights to service a particular territory of a metropolitan area. The companies typically pay special taxes and licensing fees to local municipalities. A local municipality gives monopoly rights to a cable company because these industries
experience declines in their average cost of production as their output increases; a characteristic of natural monopoly.
John has just tried on the most comfortable pair of pants that he has ever known. The pants are a(n)
experience good.
If a monopolistically competitive firm selling an information product engages in marginal cost pricing, it will
fail to earn sufficient revenues to cover its fixed costs.
The difference between monopolistic competition and perfect competition is that in comparison to perfect competition, monopolistic competition has
fewer firms, product differentiation, some price control, and relatively easy but not barrier-free entry.
Which of the following is a provision of the Robinson minus Patman Act?
forbids price discrimination is a provision of the robinson - patman act?
All of the following shift the labor demand curve EXCEPT changes in
fringe benefits offered to employees.
A perfectly competitive firm that hires labor and sells its product in purely competitive markets will
have a downward-sloping demand curve for labor. This is the correct answer.
Information products use information-intensive inputs and are characterized by
high fixed costs but low marginal costs.
Other things equal, an increase in the productivity of labor will lead to
higher wages
The Sherman Act outlaws
monopolization.
Experience goods are goods that consumers
. must consume in order to assess them properly.
The table above gives some data from the production function of a firm that is a perfect competitor in both the product and labor markets. The wage rate in the industry is $260 and the price of the good produced is $20. The profit-maximizing quantity of labor to hire is
103 workers.
A perfectly competitive firm faces the marginal product schedule shown above. The price of the product is $25 and the wage rate is $320 per worker. The marginal revenue product of the 14th worker is
200
Suppose that a company based in Dallas, Texas, confronts only four other rival firms. Its own market share is 28 percent, which ties it with the other largest producer and seller in the industry. The other three firms each have a 14.67 percent market share. What is the four-firm concentration ratio for this industry? The four-firm concentration ratio for this industry is
85.3
Monopolistic competition is similar to perfect competition because
A. in both industry structures, there are no barriers to entry
According to game theory, the strategic interaction between two or more individuals can take the form of
All of the above are correct.
Oligopolies may emerge in an industry because of
All of the above.
The government regulates monopolies because
All of the above.
Which of the following will not shift the supply of labor?
An increase in the wage rate.
The Supreme Court has generally considered a firm to be an illegal monopoly under the Sherman Act if
Both B and C are required for a firm to be considered a monopoly.
Consider a monopolistically competitive firm with the revenue and cost conditions depicted in the figure on the right. Which of the following statements best describe(s) the firm's behavior that it is charging a price greater than marginal cost? I. The firm is behaving anticompetitively and taking advantage of consumers. II. The firm is charging a price over and above the minimum average total cost to cover for the cost of product differentiation. III. Consumers willingly accept the increased production costs in return for more choice and variety of output.
Both II and III.
Network effects can cause the demand for a product either to expand or to contract relative to what it would be if there were no network effects because of
Both of the above.
Why are brand names and advertising important features of monopolistic competition?
Both of these techniques can be used to increase the demand for the product.
Which of the following is an example of an agency concerned with social regulation?
Consumer Product Safety Commission
In 2003, the U.S. government created a "Do Not Call Registry" and forbade marketing firms from calling people who placed their names on this list. Today, an increasing number of companies are sending mail solicitations to individuals inviting them to send back an enclosed postcard for more information about the firms' products. What these solicitations fail to mention is that they are worded in such a way that someone who returns the postcard gives up protection from telephone solicitations, even if they are on the government's "Do Not Call Registry." In what type of behavior are these companies engaging? Explain your answer.
Creative response behavior. Firms legally satisfy the terms of the regulation but evade its intent.
The following table gives final product price elasticity data for four industries. Industry A B C D Price Elasticity of Demand 0.4 0.9 1.3 1.5 Other things equal, the greatest elasticity of demand for labor will be in industry
D
Which of the following federal agencies is engaged in social regulation?
Equal Employment Opportunity Commission
Definitive evidence of serious resource misallocation due to oligopolies exists in the United States.
False
Explain why the short-term effects of outsourcing on U.S. wages and employment tend to be more ambiguous than the long-term effects.
In the short run, the effects of outsourcing depend on whether it's done by U.S. or foreign firms. In the long run, wages and employment in the U.S. increase as countries specialize in producing things at which they're most efficient.
What is a cartel?
It is an association of producers in an industry that agree to set common prices and output quotas to prevent competition.
If the price of golf balls increases, what will likely happen to the demand for golf club manufacturing employees?
It will increase.
Which of the following is NOT a government response to asymmetric information?
Manufacturer's warranties
Which of the following is NOT a characteristic of monopolistic competition?
Marginal cost pricing in the long run
In which industry structure is advertising and sales promotion likely to be most important?
Monopolistic competition
Which of the market structures has some ability to set the price and not earn long-run economic profits?
Monopolistic competition.
Which of the market structures has unrestricted entry and exit, many sellers of the product and some ability to set the price?
Monopolistic competition.
Strategic behavior and game theory are features of which market structure?
Oligopoly
Once a cartel agreement has been made, it is rare for the agreement to break down.
Once a cartel agreement has been made, it is rare for the agreement to break down.
Refer to the above figure. Which panel represents what happens in the U.S. job market in the short run when U.S. firms substitute labor outside of the U.S. for labor inside the U.S.?
Panel A
Refer to the above figure. Which panel represents what happens in the foreign job market in the short run when U.S. firms substitute labor outside of the U.S. for more labor inside the U.S.?
Panel B
What is the only market structure that does not have non-price competition?
Perfect Competition.
Which of the market structures has so many sellers of the product no one firm can influence the market price?
Perfect competition.
Which of the following characteristics applies to a monopolistically competitive industry?
Products are similar, but not identical, to competitors' products.
Which of the following is an explanation of the share minus the minus gains comma share minus the minus pains theory?
Regulators who are invested in keeping their jobs must please both industry and consumers
Which antitrust law has two main provisions, one against conspiring with others to restrict competition and the other making it a felony to monopolize or attempt to monopolize?
Sherman Act
Consider the following payoff matrix. Firm 1 and Firm 2 are seeking to choose between Format A and Format B for their products. Which of the following statements best describes their profit-maximization?
Since there are no network effects, Firm 1 would maximize its profit by producing format B and Firm 2 would maximize its profit by producing format A.
Recently, Swedish companies have outsourced manufacturing labor previously performed by Swedish workers at $18 per hour to U.S. workers who receive a wage rate of $14 per hour. All of the following will be the effects of Swedish manufacturing-labor outsourcing except
Swedish wages will rise and employment will fall.
Recently, Swedish companies have outsourced manufacturing labor previously performed by Swedish workers at $19 per hour to U.S. workers who receive a wage rate of $12 per hour. All of the following will be the effects of Swedish manufacturing-labor outsourcing except
Swedish wages will rise and employment will fall.
Recently, Swedish companies have outsourced manufacturing labor previously performed by Swedish workers at $21 per hour to U.S. workers who receive a wage rate of $15 per hour. All of the following will be the effects of Swedish manufacturing-labor outsourcing except
Swedish wages will rise and employment will fall.
Which of the following is not a key antitrust law?
The Contestable Markets Act.
Which of the following is not a key factor that influences the elasticity of demand for labor?
The availability of labor in the market.
What does the long-run price equal for an informational product?
The price equals average total cost.
Which of the following characteristics is true for both perfectly competitive and monopolistically competitive firms in the long run?
There are zero economic profits.
There are a number of reasons why labor supply curves will shift in a particular industry. Which one of the following is NOT one of them?
There is a change in the market wage rate.
Each firm purchasing labor in a perfectly competitive market can purchase all of the input it wants at the going market wage.
True
If a small number of firms in an industry are able to secure the bulk of the payoffs resulting from positive market feedback, oligopoly is likely to emerge as the prevailing market structure.
True
In a perfectly competitive labor market, firms are price takers.
True
The percentage of sales contiributed by the leading four firms in an industry is known as the four-firm concentration ratio.
True
Initially, the market wage for U.S. workers providing technical support for customers of U.S. computer manufacturers is $19 per hour in the graph on the left, while the market wage for Indian workers who provide the same service is $8 per hour in the graph on the right.
U.S. firms have an incentive to outsource work to India.
Suppose that until recently, U.S. firms that produce digital apps had been utilizing only the labor of qualified U.S. workers at a wage rate of $36 per hour. Now, however, these firms are outsourcing to Russia, where qualified workers are available at a dollar wage rate of $18 per hour. Evaluate the effects of this new U.S. app-labor outsourcing initiative on U.S. and Russian employment levels and wages.
Wages and employment in the U.S. will decline; wages and employment in Russia will increase.
The major goal of social regulation is
a better quality of life through a less polluted environment, better working conditions, and safer and better products.
Which of the following goods would most likely be advertised using largely informative advertising?
a car
An example of a cooperative game would be
a cartel.
Which of the following will NOT shift the MRP curve for labor?
a change in the wage rate in the market
A violation of the Sherman Act requires
behavior that indicates intent to monopolize.
An industry's equilibrium wage rate is established
by the intersection of the industry supply and demand curves for labor.
When regulators identify with the special interests of the industry they regulate, this behavior conforms with the
capture hypothesis.
In a two-sided market with network effects, the platform will likely
charge a higher price for end users that are more affected by a positve market feedback.
U.S. securities firms recently agreed to pay a record amount of $1.4 billion in settlement charges brought by government regulators. Regulators claimed that firms had abused investors during the market boom of the 1990s. Abuses included analysts tailoring their research reports and ratings on the stocks they covered in order to win more business for their firm. If this settlement causes Wall Street firms to comply with the letter of the law but they violate the spirit of the law, the firms are engaging in
creative response.
Products with qualities that consumers lack the expertise to assess without assistance are
credence goods.
Suppose a firm can charge a relatively low price to try to compete actively with its rivals, or it can charge a relatively high, collusive price. If its strategy is to charge the low price regardless of the other firms' decisions, this low-price is the firm's
dominant strategy.
When a player in a game adopts a strategy which always yields the highest benefit regardless of what the other player does, that player is using a(n)
dominant strategy.
The number of firms in a monopolistically competitive market means that
each firm has a relatively small share of the total market since there are many firms in the industry.
Two oligopolists have to decide on their pricing strategy. Each can choose either a high or a low price. If they both choose a high price, each will make $12 million, but if they both choose a low price, each will make only $8 million. If one sets a high price and the other a low one, the low-priced firm will make $16 million, but the high-priced firm will make only $4 million. In the absence of collusion,
each will choose the low price.
A firm that produces an information product will
earn zero economic profits in the long run.
The monopolistically competitive firm in the diagram is
earning positive economic profits.
Which of the following is a condition that helps enforce a cartel agreement?
easily observable prices
A monopolistic competitor is in long-run equilibrium when
economic profits are equal to zero and the average total cost curve is tangent to the demand curve.
Firms will enter a monopolistically competitive industry when there are
economic profits. This will shift demand to the left, thus reducing each firm's market share and economic profits.
The most common reason that oligopolies exist is
economies of scale.
A natural monopoly exists when
economies of large-scale production are substantial, leading to a single-firm industry.
Suppose at the current level of labor used, MRP = $100 and MFC = $50. To maximize profits, the firm should
hire more labor.
In a perfectly competitive labor market, the labor supply curve facing the firm will be
horizontal.
The demand for a resource is a derived demand. This is because
if there were no demand for output, there would be no demand for input.
The Supreme Court has defined the offense of monopolization to
include the possession of monopoly power and the willful maintenance of that power.
Cartels are difficult to maintain in the long run because
individual members may find it profitable to cheat on agreements.
The type of advertising used for a search good is
informational advertising.
The monopolistically competitive firm at a level of output of Q1 in the diagram is
in long-run equilibrium.
Suppose that a business has developed a very high-quality product and operates more efficiently in producing that product than any other potential competitor. As a consequence, at present it is the only seller of this product, for which there are few close substitutes. This firm
is not in violation of U.S. antitrust laws because there has not been any "willful acquisition or maintenance of monopoly power" in the relevant market.
Persuasive advertising is the type of advertising that
is used to induce a consumer to discover previously unknown tastes and preferences.
One weakness of the Sherman Act is that
it fails to clearly define restraint of trade.
If the natural monopoly shown in the accompanying graph uses marginal cost pricing, then
it will make an economic loss.
A firm that employs labor located outside the country in which it is located engages in
labor outsourcing.
We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate when
labor represents a relatively small portion of total costs.
A short-run increase in the price of a firm's output will typically
lead to more employment in the competitive firm.
The monopolist's MRP curve will always be
less elastic than it would be for a perfectly competitive firm in the product market because the product price falls for a monopoly.
The market demand curve for labor is
less elastic than the horizontal summation of the individual firms' demand curves because output price changes as total output changes.
For a monopolistic competitor experiencing a short-run loss, price is ________ average total cost and ________ marginal cost.
less than; greater than
If a public service commission requires a natural monopoly to set its price equal to the long-run marginal cost, this will result in
losses to the monopoly.
In the figure, the profit-maximizing monopolistically competitive firm will
make a profit of $30,000.
A monopolistically competitive firm is producing at an output level in the short run where average total cost is $ 4.50, price is $ 4.75, marginal revenue is $ 2.50, and marginal cost is $ 3.00. This firm is
making positive profits and is producing to many units to maximize profits
The additional cost associated with the hiring of one more unit of labor is known as the
marginal factor cost of labor.
The change in total output due to the change in one variable input, while holding all other inputs constant, is the
marginal physical product.
An unregulated natural monopolist will produce to the point where
marginal revenue equals marginal cost.
The addition to revenue obtained from firing an additional unit of labor is
marginal revenue product.
The legal system typically defines monopoly by looking at a firm's
market share.
Carol has just purchased a cereal she saw advertised on TV because of the health benefits contained in the ad. The TV ad is an example of
mass marketing.
The type of mergers that the Federal Trade Commission will most likely challenge are
mergers of firms within a relevant market.
A market situation in which a large number of firms produce similar but not identical products is called
monopolistically competitive.
As the wage rate falls, other things constant, perfectly competitive firms will employ
more workers.
When there is a tendency for a particular product to fall out favor with additional consumers because other consumers have chosen not to purchase the product,
negative market feedback occurs.
If monopolistically competitive firms earn short-run economic profits, we expect to see
new firms enter the industry, which shifts the demand curves of the existing firms to the left until firms earn zero economic profits.
All of the following are possible reasons for the occurrence of oligopolies except
no impediments to enter or exit the market.
The marginal revenue product of labor declines as the number of workers increases because
of the law of diminishing marginal product.
One major difference between oligopoly and perfect competition is that
oligopolistic firms act interdependently while competitive firms operate independently.
Long-run economic profits are possible under
oligopoly and monopoly.
In a zero-sum game
one player's losses are offset by another player's gains.
Which of the following is a provision of the Federal Trade Commission left parenthesis FTC right parenthesis Act?
outlaws predatory pricing and deceptive business practices
Employment of labor in a country other than the firm's home country is called
outsourcing
Some companies are having their technical support calls answered by people located in India. This is an example of
outsourcing.
If there is no product differentiation at all, then the individual firm has a demand curve that is
perfectly elastic and identical to the firm in perfect competition.
Frank purchases snickle-dees only because his friends do. This is a
positive market feedback.
When network effects are important then an industry can experience
positive market feedback.
The fact that a monopolistically competitive firm does not produce at the minimum ATC can be viewed as the cost of generating
product differentiation and variety.
A local cable company, the sole provider of cable television service, is regulated by the municipal government. The owner of the company claims that she is normally opposed to regulation by government, but asserts that regulation is necessary because local residents would not want a large number of different cable crisscrossing the city. The owner is defending the regulation by the city because
regulation will prevent other competing firms from entering the market.
Marginal cost for an information product would
remain constant as quantity increases.
In practice, regulators generally
require firms to set price equal to average cost.
In which industry is monopolistic competition most likely to be found?
retail trade
Which of the following is an example of tie-in sales?
selling one product only if another product is purchased
Cost of service pricing requires a natural monopolist to
set a price equal to average cost
Rate of return pricing requires a natural monopolist to
set a price that allows a competitive return on investment
The downward slope of the demand curve of a monopolistically competitive firm implies that the firm has
some monopoly power over price, and therefore advertising may increase profits.
Which of the following is not a characteristic of an oligopoly?
stragtenic independance
At the beginning of each semester, the university cafeteria posts the prices of its sandwiches. Business students note that as soon as the university posts these prices, the area delis adjust their prices accordingly. This pricing practice may be due to all of the following except
that the local delis are following a dominant strategy.
The U.S. Justice Department prosecuted Microsoft under the terms of
the Sherman Act.
The first legislation enacted to control the creation and growth of monopoly in the U.S. was
the Sherman Antitrust Act.
Monopolistic competition and perfect competition are similar in that each market structure is characterized by
the absence of long-run economic profits.
The theory that regulators often end up adopting the views of the regulated is known as
the capture hypothesis.
When production is characterized by persistently declining long-run average costs as output increases,
the costs of production are greater when competition exists than when a single firm produces a good.
Recently, a food retailer called Whole Foods sought to purchase Wild Oats, a competitor in the market for organic foods. When the Federal Trade Commission (FTC) sought to block this merger on antitrust grounds, FTC officials argued that such a merger would dramatically increase concentration in the market for "premium organic foods." Whole Foods' counterargument was that it considered itself to be part of the broadly defined supermarket industry that includes retailers such as Albertson's, Kroger, and Safeway.
the definition of the market.
A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that
the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal.
The long-run equilibrium for a firm in an information product industry exists at a point at which
the demand curve is tangent to the average total cost curve.
The elasticity of demand for labor will be more elastic when
the greater the elasticity of demand for the final product
If a firm employs an extra unit of labor, the additional product generated by employing the extra unit of labor is
the marginal physical product of labor.
If the average total costs are the same for a perfectly competitive firm and a monopolistically competitive firm, then we know that
the monopolistically competitive firm will produce fewer units than the perfectly competitive firm.
Protecting consumers from problems arising from asymmetric information is a rationale for
the regulation of non-monopolistic industries.
Which of the following statements is not correct: The price elasticity of demand for a variable input will be greater
the shorter the time period available for adjustment.
The price elasticity of demand for a variable input will be more elastic in all the following cases EXCEPT
the shorter the time period being considered.
The largest components of federal regulation are
the transportation sector and the environment.
Cartels are more likely to succeed when
there are significant barriers to entry
Credence goods are particularly susceptible to the lemons problem because
they have qualities that are difficult for consumers to fully assess.
People do not usually behave in a noncooperative fashion even when it is in their immediate interest to do so because
they know they will have repeated dealings with the other people.
Suppose technological change occurs so that a regulated firm could produce the product at substantially lower costs. Further, the regulatory agency requires the firm to lower prices to consumers, but the reduction in price is less than the reduction in costs so that profits for the firm increase too. This would be evidence in support of
the share-the-gains, share-the-pains theory of regulation.
The primary purpose of economic regulation is
to control the price that regulated enterprises are allowed to charge.
One of the fundamental problems a cartel faces is
to determine how much each producer will decrease its output.
Which of the following is NOT an objective of economic regulation?
to fix prices so that they are never allowed to rise
The main rationale for government regulatory functions is
to protect consumer interests.
When a firm is selling an experience good it is more likely to
use persuasive advertising.
A merger between firms in which one firm purchases an input from the other is called a
vertical merger.
Which of the following is an explanation of a feedback effect?
when products have too many warning lables, consumers may not read any of them
A positive-sum game occurs
when the sum of the two players' outcomes is positive.
Goods A and B are substitutes. If the price of good A falls, the marginal revenue product of good B
will shift in.
If an industry has 25 firms that collectively have $150 million in total sales and the top three firms in this industry account for $78 million in sales and the fifth through twentyminusfifth firms account for $60 million in sales, what is the amount of sales for the fourth largest firm?
$12 million
perfectly competitive firm faces the marginal product schedule shown above. The price of the product is $20 and the wage rate is $320 per worker. The marginal revenue product of the 14th worker is
$120.
in the figure, total cost for this profit-maximizing monopolistically competitive firm is
$70,000.
Which of the following is NOT a government response to asymmetric information?
Manufacturer's warranties
Which of the following acts outlawed selling products at "unreasonably low prices" with the intent of reducing competition?
Robinson-Patman Act
Which of the following are products or services of oligopolists that you regularly purchase or own?
automobiles, personal computers, and gasoline
Labor outsourcing by U.S. firms tends to ________ U.S. wages and employment. Whenever foreign firms engage in labor outsourcing in the United States, U.S. wages and employment tend to ________.
decrease; increase
An individual firm in a monopolistically competitive industry faces a ________ demand curve and a(n) ________ marginal revenue curve.
downward-sloping; downward-sloping
A game in which the players will not negotiate is a
non-cooperative game.
Research into genetically modified crops has led to significant productivity gains for countries such as the United States that employ these techniques. Countries such as the European Union member nations, however, have imposed controls on the import of these products, citing concern for public health. The European Union's regulation of genetically modified crops is an example of
share-the-gains, share-the-pains hypothesis, if they have genuine health concerns.
