Costa Rica is a leading exporter of bananas. What explains the comparative advantage of this country in banana production?
A) investment by multinational firms such as Chiquita Brands International and the Dole Food Company
B) climate and soil conditions in Costa Rica which are well-suited for banana production
C) positive externalities
D) a large supply of unskilled labor
B
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Arnie's Airlines is a monopoly airline that is able to price discriminate. If Arnie's decides to price discriminate, then
A) Arnie's profit increases. B) consumer surplus increases. C) Arnie's revenues decrease. D) Arnie's sells fewer tickets. E) Arnie can no longer set a price that depends upon the buyer's willingness to pay.
Economies of scale occur where
a. long-run average cost falls as new firms enter the industry b. short-run average cost falls as new firms enter the industry c. long-run average cost falls as one firm expands plant size d. short-run average cost falls as one firm expands plant size e. long-run average cost rises as one firm expands plant size