In a contestable market the costs of entering and leaving the market are very:
A. high.
B. low.
C. low, but firms have no incentive to enter or leave.
D. high and firms have no incentive to leave.
Answer: B
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The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What is the opportunity cost of increasing the production of rice to 15 tons?
A) 9 thousand bottles of wine B) 12 tons of rice C) 6 thousand bottles of wine D) 15 thousand bottles of wine E) Nothing, it is a free lunch.
Firms use hostages
A) to force employees to work. B) to encourage good behavior. C) to get employees to work for less money. D) None of the above.
A collusion occurs when firms act together to reduce output and keep prices high
a. True b. False Indicate whether the statement is true or false
A competitive market economy with low barriers to entry affords an entrepreneur with
a. an environment that shields each currently successful producer from changing market conditions. b. the opportunity to bring new and different products and services to the market. c. little opportunity for wealth creation. d. a static business environment.