What determines how much market power a firm has?
What will be an ideal response?
The extent to which a firm can exercise market power is limited by the ease with which consumers can substitute for its product.
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Scarcity is represented on a production possibilities frontier figure by
A) the amount of the good on the horizontal axis forgone. B) the fact that there are only two goods in the diagram. C) technological progress. D) the fact there are attainable and unattainable points.
To abstract from reality in an economic model means that:
a. we include only a few of the essential aspects of reality. b. the economic study surveys only a very limited period of time. c. we include only those elements which support our hypothesis. d. the model includes every aspect of the real world. e. the model examines the actions of the consumers in the absence of producers and the government.
Which of the following is an antidumping argument in favor of restrictions on foreign trade? a. Foreign producers must be prevented from exporting their goods below cost of production
b. Domestic workers must be protected from the lower wages paid in foreign countries. c. The nation's security demands we ensure an adequate domestic supply of certain strategic goods. d. Do unto others as they do unto you. e. Industries in the early stages of development must be protected from more mature producers.
Firms need to know the shape of a demand curve to use marginal analysis
a. True b. False Indicate whether the statement is true or false