All of the following government actions create barriers to entry EXCEPT
A) limiting the number of airlines that may operate at an airport.
B) granting a patent to a drug company.
C) requiring a pizza parlor to get a business license.
D) giving a power company exclusive use of the city's transmission lines.
C
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Explain why "bad cars drive out the good ones" in the market for used cars
What will be an ideal response?
The production possibilities curve for capital and consumer goods is concave to the origin because: a. of decreasing opportunity costs of production
b. resources are not perfectly adaptable to the production of both goods. c. both consumer goods and capital goods equally contribute to economic growth. d. the level of technology along the frontier is assumed to vary. e. of constant returns to scale.
Paul and David work for the same company and have the same job title, education, work experience, and are equally skilled at what they do. Paul works the night shift and is paid $60,000 a year, while David works a regular day shift and is paid $55,000 a year. Which of the following is the best explanation for why Paul earns more than David?
a. Paul has more human capital than David. b. David has more human capital than Paul. c. Paul has received a compensating differential. d. Aside from pay, the night shift is more desirable than the day shift.
Economists use the notation Q = f(L,K) to describe:
a) the financial relationship between the inputs that a firm uses and the outputs that it produces. b) the level of output (Q) required to fully employ labour (L) and capital (K). c) the flow of labour (L) and capital (K) services that are available when output is (Q). d) the arithmetic relationship between the outputs that a firm uses and the inputs that it produces. e) the technological relationship between the inputs that a firm uses and the outputs that it produces.