Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment.
B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs.
C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place.
D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
Answer: A
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An external effect that generates costs to a third party is called
a. free-ridership c. a negative externality b. a positive externality d. a marginal private cost
Which of the following statements is correct for the case of a downward-sloping demand curve (beyond the first unit of output)?
A) P = AR = MR B) P = AR > MR C) P > AR > MR D) P = AR < MR
Marginal revenue of nth unit of output is:
a. total revenue of (n+1)th unit minus total revenue of nth unit. b. total revenue of nth unit minus total revenue of (n-1)th unit. c. total revenue of (n+1)th unit minus total revenue of (n-1)th unit. d. the sum of total revenue of (n+1)th unit and nth unit. e. the sum of total revenue of (n+1)th unit and (n-1)th unit.
Suppose that a perfectly competitive market is in equilibrium. Then,
a. the equilibrium quantity provides the maximum possible benefit to buyers b. the equilibrium quantity provides the maximum possible benefit to buyers and sellers combined c. total (producer + consumer) surplus is equal to price x quantity. d. an additional unit, if produced, would produce a benefit that exceeds its cost of production e. an additional unit could be produced at a cost to some producer that is less than the benefit to some consumer