Under some circumstances, trade could stifle the development of new industries and reduce global efficiency. All of the following describe conditions that could lead to that situation EXCEPT
A) an initial head start gives a scale advantage to already existing firms in one country.
B) diseconomies of scale make it impossible for new firms to enter the market.
C) a location has a better-developed linkage between suppliers and producers, giving it a cost advantage.
D) a historical accident, such as the shifting of airplane production to the United States to avoid World War II bombings, causes firms in one location to have a competitive advantage.
B
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The above figure shows the demand and cost curves facing a monopoly. At the profit-maximizing price, the elasticity of demand equals
A) -1. B) zero. C) infinity. D) -3.
If the United States changed its laws to allow for the legal sale of a kidney, which of the following is least likely to occur?
a. The supply of kidneys would increase. b. The shortage of kidneys would decrease. c. Many lives would be saved. d. The allocation of kidneys would be fair.