What are three policy options for dealing with pure monopolies that are entrenched and inefficient?
What will be an ideal response?
First, government can break up the monopoly into competing firms through the use of antitrust laws. Second, government can regulate the monopoly. In this latter case, the monopoly firm is permitted to exist, but its price and output decisions are subject to public scrutiny through regulation. Third, the government may do nothing if the monopoly is short-lived.
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In games with more than three players, the vertical axes measure
A) the number of players. B) payoffs. C) time. D) all of the above
Crisps and Smith's are the only two bakeries that sell cookies in a small community. Crisps sells butter cookies while Smith's sells chocolate cookies
Which of the following will happen if Smith's lowers its price for cookies slightly below Crisps's price? A) Crisps will lose all its customers to Smith's. B) Smith's will lose all its customers to Crisps. C) Crisps will face a lower demand for its cookies. D) Smith's will face a lower demand for its cookies.
Which of the following is the prime objective of an industrial policy for any country?
a. To secure a leading global role for selected domestic industries b. To promote and encourage the import of goods and services c. To secure the interests of migrant workers d. To encourage specialization of labor e. To ensure a high level of competition for domestic firms
The principle of comparative advantage implies that
A. most people are harmed by trade. B. we should limit the extent to which people specialize. C. only wealthy countries ultimately can benefit from international trade. D. every country can benefit from international trade.