High barriers to entry protect the market power of existing firms and discourage the formation of firms which:
a. invest heavily in research and development activities.
b. use illegal procedures to capture the market.
c. are inefficiently small and cannot realize economies of scale.
d. are large enough to dominate the existing firms.
C
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Which of the following is an example of an intermediate good or service?
A) gasoline purchased by Sam for her commute to work B) flour purchased by Jake to bake a cake for his spouse C) training seminars for employees of an accounting firm D) golf balls sold to Tiger Woods E) None of the above are examples of intermediate goods or services.
Excess capacity and inefficiency result under monopolistic competition.
Answer the following statement true (T) or false (F)
When the nation of Duxembourg allows trade and becomes an importer of software,
a. residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises. b. residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls. c. residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises. d. residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls.
In the figure below, AB is the production-possibility curve of Canada. I1 and I2 are two of the community indifference curves of Canada. With free trade, the international price ratio is 0.25 bushel of wheat/bale of cotton, and Canada will import:
A. eighty bushels of wheat. B. twenty bushels of wheat. C. forty bales of cotton. D. sixty bales of cotton.