Discuss specific firm behavior that reduced the level of competition in an industry. What are the opportunity costs of greater concentration?
What will be an ideal response?
Firms in an oligopoly market can engage in practices that reduce competition, such as patents or exclusive licenses to limit the amount of competition. In the airline industry, large dominant companies, such as Delta and United, have engaged in predatory pricing policies to temporarily cut prices to drive out rivals. In the wireless phone industry, the proposed merger between ATamp;T and T-Mobile represented the use of mergers in reducing competition in a specific market. In the cereal and tobacco markets, firms have used product proliferation and paying high fees for shelf placements as a way to deter competitors from entering an industry. Pepsi and Coke use exclusive licenses with fast-food outlets to create a monopoly in specific restaurant markets.
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The extra pay people earn in exchange for undertaking risky or otherwise undesirable work is called
A) a compensating differential. B) arbitrage income. C) overtime pay. D) a fringe benefit.
Which of the following individuals are considered officially unemployed?
a. a discouraged worker b. an individual who quits his job to raise a child c. an individual who is not looking for a job because he works in the underground economy d. None of the above
Suppose the Canadian government agrees to establish an official exchange rate at which 1$ Canadian is equal to $0.925 U.S. Now suppose the demand for the Canadian dollar increases as more Americans travel to Canada causing the demand curve for Canadians dollars to shift to the right as shown in Figure (a). If the Canadian government wishes to maintain the official exchange rate then it must increase the supply of its currency as shown in Figure (b) by
a. selling U.S. dollars.
b. buying U.S. dollars.
c. restrict the amount of Canadian dollars in foreign exchange markets.
d. Any of the above.
How are pollution and GDP related?
A. only the harm from pollution is included in GDP B. the value of produced goods that lead to pollution are counted in GDP and pollution is not counted C. goods whose production creates pollution are not counted in GDP