Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that:
A. consumers are boycotting local retailers.
B. Wal-Mart engages in illegal acts of monopolization.
C. there are diseconomies of scale in retail sales.
D. there are economies of scale in retail sales.
E. Wal-Mart is managed by ruthless business people.
Answer: D
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A) export tariffs. B) deadweight. C) ultimate tariffs. D) embargoes.
In which industry structure is advertising and sales promotion likely to be most important?
A) perfect competition B) monopoly C) monopolistic competition D) All of the above are equally reliant on effective advertising and promotion.
If a government started with a budget deficit and moved to a surplus, domestic investment
a. and the real exchange rate would rise. b. and the real exchange rate would fall. c. would rise and the real exchange rate would fall. d. would fall and the real exchange rate would rise.
A middle-ground exchange rate regime, between fixed and floating, is NOT called:
a. a managed float. b. a dirty float. c. limited flexibility. d. a free float.