1. Entrepreneurship is a A. Distruptive B. Stabalizing force in an economy.
2. True or False: Economic models cannot fully capture the dynamic process of competition, in particular, the discovery of new products and methods.
3. True or False: Our standard of living would be higher if the government always bailed out troubled businesses.
4. True or False: If a firm is operating in a contestable market, it should operate at the efficient production level and earn a positive profit.
5. The contestable market model has important policy implications. If there is concern that a market is not sufficiently competitive, what can policymakers do to increase competition in a given industry? Check all that apply.
- Increase entry barriers
- Decrease entry barriers
- Decrease regulations