What is necessary for a firm to be part of a perfectly contestable market?
What will be an ideal response?
To be part of a perfectly contestable market, the firm must have capital that is both mobile and easily transferable from one market to another.
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In the United States, the good or service given the most weight in the CPI basket when calculating the CPI is
A) food and beverages. B) taxes. C) medical care. D) housing. E) recreation.
If Australia has relatively more land per worker, and Belgium has relatively more capital per worker, then if trade began between these two countries
A) the relative price of the land-intensive product would increase in Australia. B) the relative price of the capital-intensive product would increase in Australia. C) the relative price of the land-intensive product would increase in Belgium. D) the relative price of the capital-intensive product would decrease in Belgium. E) relative product prices would diverge between Australia and Belgium.
Suppose Q = KaLb, if a + b > 1 the isoquants will be
a. upward sloping. b. progressively closer together at higher quantities. c. progressively further apart at higher quantities. d. equally spaced.
In the small country of Talisman, the liquor industry is monopolized by a single producer Best Drinks Inc Best Drinks charges high-end customers like 5-star hotels a much higher price than it charges local pubs. This discrimination is possible only if:
a. price discrimination is legal in Talisman. b. we assume Best Drinks can prevent pub owners from buying liquor and selling it to 5-star hotels. c. consumers in Talisman have similar price elasticities of demand for liquor. d. we assume Best Drinks is a natural monopoly.