Why is a government franchise likely to serve as a stronger barrier to entry than possessing technology than competitors don't currently posses?
What will be an ideal response?
The reason is that government franchise can be enforced by law whereas competing firms can always develop new technologies that may make existing technologies obsolete and this can reduce whatever monopoly power was enjoyed by the firm in possession of the older technology.
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An increasing-cost industry is so named because of the positive slope of which curve?
A) Each firm's short-run average cost curve B) Each firm's short-run marginal cost curve C) Each firm's long-run average cost curve D) Each firm's long-run marginal cost curve E) The industry's long-run supply curve
If consumption is $6 billion, investment is $3 billion, government purchases are $1 billion, and GDP is $12 billion, then net exports must equal:
A. $22 billion. B. $10 billion. C. $2 billion. D. $12 billion.
Which of the following is an example of a normative, as opposed to positive, statement?
a. Following the most recent recession, the economy is recovering at a slower than usual pace. b. To stimulate the economy during the most recent recession, the federal government increased spending. c. In response to the most recent recession, the federal government extended the duration of unemployment benefits. d. The federal government's responses to the most recent recession were insufficient.
Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that
A) the law of demand has been violated. B) the number of personal trainers has increased. C) the demand for personal trainers has increased. D) personal trainers are deliberately charging high prices because they provide services for wealthy clients.