A limit on the dollar worth of oranges imported into the United States is an example of a quantity quota.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2The demand curve faced by a perfectly competitive firm is:
a. downward sloping.
b. the same as the market demand curve.
c. horizontal.
d. perfectly inelastic.
QUESTION 3When Glaxo-Wellcome introduced AZT, an AIDS drug, it was able to enjoy high profits because:
a. the drug was highly recommended by doctors.
b. of the quick response of rivals in introducing substitute drugs.
c. of barriers to entry provided by patents.
d. of its competitive price in the pharmaceutical industry.
e. it experienced constant returns to scale in the long run.
QUESTION 4Which of the following need not be true of a monopoly?
a. The firm must be the only producer of the product.
b. The product must have no close substitutes.
c. There must be high barriers to entry.
d. The firm must earn an economic profit in the short run.
QUESTION 5Many economists believe that the collapse of world trade and the depression in the 1930s were linked by a decrease in real income caused by producing on the basis of comparative advantage.
a. True
b. False
Indicate whether the statement is true or false
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