Economics

A reason why it is difficult for developing countries to maintain a ca

A reason why it is difficult for developing countries to maintain a cartel is that A) the elasticity of demand for a cartel’s output decreases over time. B) producers in the cartel have an economic incentive to cheat. C) economic profits discourage other producers from entering the industry. D) producers in the cartel have the […]

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Date: September 10th, 2020

Spencer and Brander’s model highlights the existence of A) aircraft i

Spencer and Brander’s model highlights the existence of A) aircraft industries. B) excess returns present in highly competitive markets. C) excess returns, or rents, available in non-competitive markets. D) the futility of government bureaucrats’ attempts to build an airplane. E) natural advantages in foreign technology firms.   ANSWER C

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Date: September 10th, 2020

International trade based on external scale economies in both countrie

International trade based on external scale economies in both countries is likely to be carried out by A) a relatively large number of price competing firms. B) a relatively small number of price competing firms. C) a relatively small number of imperfect competitors. D) monopolists in each country. E) a large number of oligopolists in […]

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Date: September 10th, 2020

In the Ricardian model, if a country’s trade is restricted, this will

In the Ricardian model, if a country’s trade is restricted, this will cause all EXCEPT which? A) limited specialization and the division of labor B) reduced volume of trade and reduced gains from trade C) nations to produce inside their production possibilities curves D) a country to produce some of the product of its comparative […]

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Date: September 10th, 2020