Bio seeds offers free genetically modified seeds (GMS) to farmers in developing countries the first season. The land accepts only GMS in any other cropping season. So providing free seeds in the first season is a strategic way to
A. enforce price discrimination.
B. regulate future demand.
C. bundle goods.
D. administer a two-part tariff.
Answer: B
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Firms continue to produce (illegally) counterfeit computer software and documentation. Some of the illegal copies are Microsoft products, though Microsoft still has a large share of the market for its products. The presence of enforced copyright protection laws indicates that the market for Microsoft software cannot be considered a competitive market because:
A. pirate producers are not profit-maximizing entrepreneurial firms. B. the products of pirates are not identical to those of Microsoft. C. buyers are not price takers. D. there are significant barriers to entry.
The quantity of reserves supplied increases as interest rates rise because
A. the Treasury borrows more at higher interest rates. B. consumers don’t want to borrow as much so more money is left in banks. C. as interest rates rise, banks fear losses so they decrease lending. D. banks find it more profitable to loan out excess reserves to other banks.
Carefully explain why monetary policy is likely to be more effective in a open economy than fiscal policy
What will be an ideal response?
The idea that tariffs should be imposed to protect new and developing industries is referred to as
A. the infant industry argument. B. the start-up argument. C. the incubator business theory. D. the new markets theory.