QUESTION The interdependence between firms in an oligopoly leads to: A. trade wars. B. a decrease in the supply. C. imitative behavior. D. higher demand. E. increased domestic consumption. ANSWER C
QUESTION Which of the following is a reason for the decline in the popularity of the radical view of FDI? A. The rise of communism in Eastern Europe B. The generally steady economic growth of those countries that embraced the radical position C. The growing belief in many countries that FDI leads to loss of […]
QUESTION The cement market in Erbia is dominated by four firms. These firms control 85 percent of selling and buying of the domestic market. Which of the following terms explains the market structure of the cement industry in Erbia? A. Perfect competition B. Monopoly C. Oligopoly D. Dual monopoly E. Monopsony ANSWER C
QUESTION Which view argues that international production should be distributed among countries according to the theory of comparative advantage? A. Conservative B. Pragmatic nationalism C. Free market D. Radical E. Keynesian economic ANSWER C
QUESTION A critical competitive feature of an oligopoly is the: A. lack of interaction among the major players. B. presence of a domestic market which is open for foreign firms. C. desire of all the major players to avoid the phenomenon of diminishing returns. D. interdependence of the major players. E. lack of imitative behavior […]
QUESTION If one firm in an oligopoly cuts prices, then most likely, its competitors will: A. make profits. B. also respond with similar price cuts. C. correspondingly raise prices. D. capture additional market share. E. not be impacted by the price cuts. ANSWER B
QUESTION QFresh, a brand for energy drinks, launched a healthy lime-based drink without preservatives. Immediately after this another brand, Fast Fizz, which manufactures energy drinks, also announced the launch of a new refreshing drink without preservatives. Then Ignite, a third brand of energy drinks, reduced the price of its apple-based drink. Which of the following […]
QUESTION Which of the following arises when two or more enterprises encounter each other in different regional markets, national markets, or industries? A. Monopoly B. Monopsony C. Cartel D. Multipoint competition E. Oligopsony ANSWER D
QUESTION A firm will favor FDI over exporting as an entry strategy when: A. the costs of establishing production facilities are high. B. the transportation costs or trade barriers are high. C. there are problems associated with doing business in a different culture. D. the products involved have a high value-to-weight ratio. E. the firm […]
QUESTION The viability of an exporting strategy is often constrained by transportation costs, particularly of products that can be produced in almost any location and have a: A. high local content requirement. B. low total landed cost. C. low value-to-weight ratio. D. low licensing tariff. E. high marginal cost. ANSWER C