For an inferior good, if the income effect more than offsets the substitution effect, we call that good
A) a Giffen good.
B) a normal good.
C) an inferior good.
D) a neutral good.
A
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The main problem with using the infant industries argument to justify protecting an industry from foreign competition is that:
a. all industries will claim that they are infant industries in order to gain protection. b. the protected industry will become too efficient and drive out foreign competition. c. once in place, it is difficult to remove protection even as the industry matures. d. it causes the goods that are produced in the protected industry to have lower prices. e. this policy compromises national security if the infant industry produces military goods.
Refer to the data. The price elasticity of demand is relatively inelastic:
Answer the question on the basis of the following demand schedule:
A. in the $6-$4 price range.
B. over the entire $6-$1 price range.
C. in the $3-$1 price range.
D. in the $6-$5 price range only.
Use the above table. If firms 3 and 4 merge, the four-firm concentration ratio will
A. increase from 60 percent to 75 percent. B. decrease from 75 percent to 60 percent. C. increase from 75 percent to 80 percent. D. not change.
Total revenue will rise if
A. demand for a good is inelastic and its price rises. B. demand for a good is elastic and its price rises. C. demand for a good is inelastic and its price falls. D. None of these choices are true.