In the new Keynesian models,
a. imperfect competition comes is the result of optimizing behavior by individuals.
b. perfect competition is assumed with respect to the product market
c. a natural monopoly is presumed for the product market.
d. both a and c.
d. None of the above
Question 2
An export industry is said to exhibit increasing returns to scale when
(a) a large-scale organization has significant competitive advantages over small-scale activities.
(b) labor utilization increases by 50 percent but export output production increases by only
20 percent.
(c) its small-scale business activity has significant comparative advantages over large-scale productions.
(d) use of capital increases by 10 percent leads to an increase in export production by 10 percent.
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