In the contestable market oligopoly model, firms ________ produce where price exceeds marginal cost.
A. always
B. are not legally allowed to
C. never
D. do not always
Answer: D
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In many cities, the market for cab services is monopolized. This monopoly arises because:
a. of economies of scale. b. of government restrictions on the entry of new firms. c. there is a limited space on the streets for taxis. d. it protects the consumers from unscrupulous drivers. e. of high fixed costs of entering the business.
Foreign direct investment occurs when a company:
a. purchases foreign securities such as stocks and bonds. b. establishes foreign operating units. c. enters into a contractual agreement involving exchange of services and payments. d. engages in international trade. e. gives aid to a Third World country.
The American Federation of Labor was organized
a. along ethnic lines b. into geographic unions c. as part of the Democratic Party d. as an industrial union e. along craft lines
Which of the following is a possible disadvantage of a tournament?
A. The outcome of a tournament may appear to be random. B. Workers will stop providing effort as soon as they believe they have no chance to win the prize. C. Workers may collude to share the prize in order to provide lower levels of effort. D. Competitors have little incentive to help one another (and they may even sabotage each other's work). E. All of the above are possible disadvantages of a tournament.