Explain why industrial policies are controversial
What will be an ideal response?
In some cases, they end up wasting large sums of money. It is difficult to know what the best industries to promote are, and so government resources may not be used effectively. Better outcomes may be achieved by simply providing the basic components of a well-functioning economy, including education, stable institutions, and sound macroeconomic policies. Additionally, there are a number of problems such as the difficulty of measure the size of market failures and rent seeking.
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If Deluxe Fruits offers a $1.00 coupon for their fruit cups, this is an example of ________.
A) second-degree price discrimination B) first-degree price discrimination C) arbitrage D) market segmentation
The value-added approach of calculating GDP:
A. is an alternative, and equally valid, way of avoiding the problem of double-counting. B. lets us break down the total value paid and see how much of it was created at each step of the production process. C. is especially useful when thinking about services involved in the resale of existing goods. D. All of these are correct.
Suppose that an industry is characterized by a few firms and price leadership. We would expect that:
A. price would equal marginal cost. B. price would equal average total cost. C. price would exceed both marginal cost and average total cost. D. marginal revenue would exceed marginal cost.
David has decided not to purchase another can of Stosh because his friends laughed at him the last time he purchased some. Stosh is no longer a popular item. David's decision is known as
A. positive market feedback. B. negative market feedback. C. price-leadership. D. negative-sum game.