Answer the following statements true (T) or false (F)
1) Because families can afford to have more children, population growth is greater in the IACs
than in the DVCs.
2) The capricious universe view is the idea that the IACs are exploiting the DVCs.
3)An advantage of direct foreign investment (compared to foreign loans) is that management
skill and technological knowledge often accompany such capital flows.
4) Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.
1) F
2) F
3) T
4) T
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The economic analysis of monopolistic competition shows that market forces eliminate profits in the long run. However, it is possible for a firm to continue to earn economic profits if the firm
A) adopts new technologies that enable it to lower its cost of production. B) expands its marketing budget. C) reduces its price to expand its market. D) expands its product offerings to appeal to a wider range of consumers.
In which of the following situations would consideration of the minimum efficient scale of operation suggest that the market should be served by a single firm to minimize production costs?
A) When the LRAC curve slopes downward over the relevant range of output. B) When the LRAC curve hits its minimum point at a relatively low level of output and then increases and the demand for output is quite large. C) When the LRAC curve hits its minimum point at a relatively low level of output but then remains constant as the scale of operation is increased and the demand for output is quite large. D) When the LRAC curve initially increases and then decreases beyond some point.
Regarding U.S. antitrust activity, the rule of reason was expressed in the
a. Standard Oil case. b. Robinson-Patman Act. c. Clayton Act. d. ALCOA case.
The price index in the base year always equals_____
a. 0 b. 10 c. 100 d. 1 e. 0.01