The concentration ratio computed nationally tends to understate the market power in local markets.
Answer the following statement true (T) or false (F)
True
Concentration ratios do not necessarily convey the extent to which market power may be concentrated in a local market. In fact, many industries, including newspapers, with low concentration ratios nationally are represented by just one or a few firms locally.
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Which of the following describes what would happen after an increase in oil prices?
a. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual increase in the wage as employment increases, leading to a leftward shift of the aggregate supply curve b. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to a leftward shift of the aggregate supply curve c. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to a rightward shift of the aggregate supply curve d. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual decrease in the wage as employment decreases, leading to a rightward shift of the aggregate supply curve e. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment increases, leading to a rightward shift of the aggregate supply curve
Answer the following questions true (T) or false (F)
1. If a country produces only two goods, then it is not possible to have an absolute advantage in the production of both goods. 2. In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it must also have a comparative advantage in the production of both goods. 3. If the opportunity cost of producing more of one good remains the same as more of that good is produced, then the production method is inefficient.