The investment demand curve will shift to the right as a result of a(n):
a. Decrease in the acquisition and maintenance cost of capital goods
b. Increase in the excess productive capacity available in the industry
c. Increase in taxes businesses pay to government
d. Decrease in the confidence of business leaders about the economy
Answer: a. Decrease in the acquisition and maintenance cost of capital goods
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Trade can be beneficial to an economy because:
A) it results in a more efficient use of the combined resources of some of the trading countries, even though it reduces efficiency in others. B) more goods and services can be obtained at lower opportunity cost. C) it prevents specialization in those activities in which countries have a comparative advantage. D) It prevents unemployment.
In discussions of barriers to entry, what is meant by the term "virtuous cycle"?
A) A virtuous cycle refers to successful research and development that leads to information that is used to develop other new products. B) A virtuous cycle refers to the situation where the pursuit of self-interest in establishing an entry barrier leads to an increase in social welfare (the "invisible hand"). C) A virtuous cycle refers to a situation where if a firm can attract enough customers initially, it can attract additional customers because its product's value has been increased by other customers using it, which attracts even more customers. D) A virtuous cycle refers to a firm using the profits from a monopoly in one market to establish a monopoly in another market.