Provide two examples of a government barrier to entry
What will be an ideal response?
1. A patent or copyright which gives an individual or a firm the exclusive right to produce a product for a given period of time, for example, a patents for pharmaceutical drugs such as the anti-depressant, Prozac, manufactured by Eli Lilly.
2. A public franchise which makes it the exclusive legal producer of a good or service, for example, PG&E is the sole provider of gas and electric utilities in northern California.
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Systemic risks are most likely to exist with regard to
a. small governments. b. large governments. c. small financial institutions. d. large financial institutions.
Specialization increases total world output.
Answer the following statement true (T) or false (F)
An industry in which 5 firms each have a 10 percent market share and 50 firms each have a 1 percent market share will have a Herfindahl index equal to:
A. 1,100. B. 500. C. 550. D. 1,500.
The World View article titled "The Education Gap between Rich and Poor Nations" says that 85 percent of all Americans graduate from high school. This is an example of
A. The inequitable distribution of income. B. Investment in human capital. C. Capital-intensive production. D. A negative externality.