How was South Korea able to use infant industry protection successfully to start its car companies, when many countries experience negative results when they use infant industry protection?
a. The protection has never stopped.
b. The protection was so small it had no effect on the car companies.
c. The protection had a definite end, whether the infant industry grew or did not grow.
d. The protection had a large enough subsidy to make companies’ profitable.
c. The protection had a definite end, whether the infant industry grew or did not grow.
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In the Solow model, if saving per worker initially exceeds investment per worker,
A) the economy will experience inflation. B) the capital—labor ratio will increase. C) investment per worker will decline. D) saving per worker will decline.
The most common reason for the existence of oligopolies is
A) ease of entry. B) economies of scale. C) diseconomies of scale. D) advertising.
Suppose a market is in equilibrium and then a price floor is established below the equilibrium price. Which of the following will happen?
a. quantity demanded will increase b. a surplus will develop c. a shortage will develop d. the quantity sold will rise e. the market will remain in equilibrium
Which of the following best explains why marginal cost eventually increases as output increases?
a. economies of scale occur b. average cost increases c. total cost increases d. marginal product decreases e. fixed cost is constant