Industries, where economies of scale dictate that only a few firms produce, will be efficient if the markets in which they sell are
a. perfect.
b. contestable.
c. close to each other.
d. protected from entry.
b
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Demand curves often do not remain stationary; they shift because of changes in other variables.
Answer the following statement true (T) or false (F)
Under fixed exchange rate, in general
A) the domestic and foreign interest rates are equal, R = R . B) R = R + (Ee - E)/E. C) the foreign and domestic interest rates are unequal. D) the expected rate of domestic currency depreciation is high. E) the expected rate of currency depreciation is one.
Comparative advantage refers to the ability to produce output with fewer resources than any other country.
Answer the following statement true (T) or false (F)
Using antitrust law to split up an unregulated natural monopoly into several competing firms:
A. would reduce product price. B. would increase product price. C. might either increase product price or reduce product price. D. will reduce average total cost.