Question

9. The Government tries to promote restrictive trade practices through antitrust laws like Sherman Act.

True or False

10. Monopolistic Competition implies that eventually there are way too many firms in the market, and thus there is:

a. unused capacity in each firm, and this is an inefficiency.

b. Each firm in the long run makes 0 economic profit.

c. Both a and b

d. Neither a nor b

11. A tax that is imposed on an economic activity, not so much to collect revenue but to discourage an economic activity, is called a Pigovian Tax

True or False

12. The term Nationalisation is used to describe circumstances where government takes over ownership of a business.

True or False

Answer 1

Answer
9 False
The sherman act was established to combat retrat in trade and monopolization.

10 Each firm in the long run makes 0 economic profit.
As new players enter the marlet the profit margin decrease till the industry is no more profitable.

11 True
Pigovian Tax is imposed on activities which have a negative externality associated with it

12 True
It is when goverment takes private assets and covert then into public assets. This was one of the aftermath of the Cuban revolution

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