Spencer and Brander's model highlights the conventional assumption that
A) government involvement in business or in the economy tends to fail.
B) government subsidies tend to waste taxpayer's money.
C) government subsidies cannot create a successfully competing export.
D) government tends to distort when it displaces Adam Smith's Invisible Hand.
E) government subsidies can produce profits that exceed the subsidy's value.
E
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Over time, the percentage of total employment in services has ________ and in agriculture, employment has ________
A) increased; increased B) decreased; increased C) stayed about the same; decreased D) stayed about the same; increased E) increased; decreased
The closer the substitutes for a good, the
A) more elastic is the demand for the good. B) less elastic is the demand for the good. C) smaller the degree of substitutability between the goods. D) larger the proportion of income that is spent on the good.
Firms in monopolistic competition charge prices that are ________ those of the other firms in the market
A) close to B) very different from C) the same as D) completely unrelated to
The president of XYZ, Incorporated is considering the purchase of new equipment. The equipment is expected to increase profits by $25,000 per year for four years. After that, the equipment will have no value
If the machine costs $80,000 and the market rate of interest is 6 percent, should your firm purchase the machine? Explain.