In the Brander-Spencer model the subsidy raises profits by more than the subsidy because of
A) the "multiplier" effect of government expenditures.
B) the military-industrial complex.
C) the forward and backward linkage effects of certain industries.
D) the deterrent effect of the subsidy on foreign competition.
E) the economies of scale once the company enters the market.
D
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Of the following, when would the U.S. exchange rate rise the most?
A) when the supply of and demand for U.S. dollars increase B) when the supply of U.S. dollars increases and the demand for them decreases C) when the supply of U.S. dollars decreases and the demand for them increases D) when the supply of and demand for U.S. dollars decrease
A profit-maximizing monopolist will receive zero profits when
A) the average total cost curve lies above the demand curve for all possible rates of output. B) the average total cost curve is tangent to the demand curve at the profit maximizing price. C) marginal revenue, marginal cost, and average total cost are all equal. D) a second firm enters the industry.
Eric lost his job because a recession caused his employer's sales to fall. This is an example of:
A. involuntary unemployment. B. frictional unemployment. C. structural unemployment. D. cyclical unemployment.
Most development economists agree that the most basic and important task of any government is to:
A. maintain a stable currency. B. ensure basic education for all citizens. C. create a stable political system. D. provide national health care system.