Barriers to entry might include all but which of the following?
a. Huge capital expenditures required to get started in production
b. Patents
c. Sole ownership of a strategic resource
d. Exclusive government franchise
e. Positive economic profit
Answer: e. Positive economic profit
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What is measured by the price elasticity of supply?
A) The price elasticity of supply measures how responsive producers are to changes in the price of other goods. B) The price elasticity of supply measures how responsive producers are to changes in income. C) The price elasticity of supply measures how responsive producers are to changes in the price of a product. D) The price elasticity of supply is a measure of the slope of the supply curve. E) The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product.
Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________
A) 1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible B) 2 rides per day C) 4 rides per day D) 6 rides per day because that is the maximum number of rides
Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?
A) a drought that sharply reduces cotton output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton
Which of the following is not correct concerning predatory dumping?
a. It may be a way to discourage the development of domestic production of a good. b. It may drive out established firms. c. There are a great number of documented cases of predatory dumping. d. In actuality, the blocking of entry on a worldwide scale would be extremely difficult to accomplish. e. In pursuing their monopoly position after dumping, dumpers may actually encourage the entry of other firms.