If the government grants a firm a public franchise to supply coal, a monopoly is created by
A) a natural barrier to entry.
B) a legal barrier to entry.
C) price discrimination.
D) All of the above answers are correct.
B
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Use the following graph showing the domestic demand and supply curves for a specific product in a hypothetical nation called Marketopia to answer the next question.
At what price will Marketopia be neither importing nor exporting the product?
A. $2.50 B. $1.00 C. $1.50 D. $2.00
A country has a comparative advantage in the good that it can produce
a. at a lower cost in terms of other goods. b. using fewer resources than its trading partner uses. c. at a lower cost than its trading partner can produce. d. using more resources than its trading partner uses.
Great Britain opted out of the ERM in 1992 because its government concluded that:
A) it wanted to increase its trade with North America rather than Europe. B) the gains from being a member of the ERM outweighed the costs from higher German interest rates. C) the costs associated with higher German interest rates outweighed the gains from being a member of the ERM. D) it was unable to agree with the French on an exchange rate between the pound and the French franc.
Which of the following is NOT true about the demand curve faced by a monopolist?
A. The demand curve is perfectly elastic. B. The firm's demand curve is the same as the market demand curve. C. The demand curve is downward sloping. D. The marginal revenue curve is below the market demand curve.