5) The purpose of Competition policies is to... a) Reduce competition b) Incenti

Question

5) The purpose of Competition policies is to... a) Reduce competition b) Incentivate competition: c) Prevent perfect competition: d) Prevent competition from foreign goods 6) Any point outside the Production-Possibilities Frontier is. a) Too expensive for the consumer b) Is still possible with existing resources in spite of being expensive c) Is possible but below existing capacity d) Is impossible with the existing resources 7) The three basic economic functions of governments are... a) Effectiveness, Efficiency and Equity; b) Efficiency, Equity and Stability c) Equity, Justice and Stability d) Stability, Efficiency and Development. 8) A microeconomic topic is.. a) Studying inflation; b) To determine GDP growth: c) To analyze the market price of oil; d) To analyze the evolution of the unemployment rate. 9) Increasing returns to scale... a) Were responsible for the development of the United States; b) were responsible for great economic inequality in tropical climates: c) Were observed in coffee plantations; d) Resulted in more egalitarian societies in the Americas. 0) Markets with perfect competition... a) Are preferable to monopolies; b) Result in goods of lower quality c) Allow prices to increase; d) Result in less quantity produced Part -Exercises

Explanation / Answer

5 (b) Healthy competition brings prosperity. So we should increase it .

6 (d) ppf shows varies combination of resources which can be used in production , beyond this production is impossible.

7 (d) stability ,efficiency and development are the basic economic function of any government.

8 (c) Oil industry is micro unit which comes under micro economics

9 (a) they put less resources and get more production in oil industries.

10 (a) because monopolies increases the prices but in perfect competition prices are low.

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