The competitive market system:
A. encourages innovation because government provides tax breaks and subsidies to those
who develop new products or new productive techniques.
B. discourages innovation because it is difficult to acquire additional capital in the form of new
machinery and equipment.
C. discourages innovation because firms want to get all the profits possible from existing
machinery and equipment.
D. encourages innovation because successful innovators are rewarded with economic profits.
Answer: D
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What type of market has few sellers?
A) perfect competition B) monopolistic competition C) oligopoly D) monopoly
The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C. Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?
A. 2 pizza pies
B. 1 pizza pie
C. 0.5 pizza pie
D. 30 pizza pie