Compared to the no-trade situation, when a country imports a good,
a. domestic consumers gain, domestic producers lose, and the gains outweigh the losses.
b. domestic consumers lose, domestic producers gain, and the gains outweigh the losses.
c. domestic consumers gain, domestic producers lose, and the losses outweigh the gains.
d. domestic consumers gain, but domestic producers lose an equal amount.
A
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For firms that sell one product in a perfectly competitive market, the market price:
A. can be influenced by one firm's output decision. B. is equal to the average total cost of a firm. C. is taken as a constant by individual firms. D. is higher than the marginal revenue of a firm
Which of the following statements is most correct?
A. We cannot compute either the ex post or ex ante real interest rates accurately. B. We can accurately compute the ex ante real interest rate but not the ex post real rate. C. We can always compute the ex post real interest rate but not the ex ante real rate. D. None of the statements are correct.
Suppose that it would cost a firm $9 million to develop a new drug. In the absence of a patent, other firms will be able to copy and bring to market a generic equivalent of the drug in three years. In each of these three years, the firm would earn monopoly profits of $4 million. A patent will generate monopoly status for the firm for twenty years. If the government knew this information ahead of time, which of the following is most correct?
A. The government should grant a patent to the firm, because the firm would not produce the drug at all without a patent. B. The government should grant a patent to the firm, because it does not have the resources to determine on a case-by-case basis exactly which inventions merit award of the patent. C. The government should grant a patent to the firm, because even with a patent the firm will not earn a monopoly profits. D. The government should not grant a patent to the firm, because the firm would earn sufficient profits to develop the drug without the patent.
The free-rider problem is
A) the use of private goods in one state by residents of another state. B) the incentive that people have to avoid paying for a public good. C) the incentive that people have once they are receiving welfare to keep getting welfare. D) that people cannot be forced to accept public goods.