Most companies that sell CDs by mail deliver in 1 to 2 weeks. Mosey Music, Inc, takes 4 weeks to deliver CDs. We should expect that Mosey Music
a. will lose all its customers
b. will not lose customers because the good in question is CDs, not the delivery date
c. will have to charge more for its CDs to make up for the business it loses through slow delivery
d. will have to charge less for its CDs to compete with firms that deliver CDs faster
e. will be able to charge the same amount for its CDs as other firms do, as long as the CD quality is the same
Question 2
Firms in a high-wage nation such as the U.S. can compete effectively with imports from low-wage nations if
a. skill levels are identical in the nations
b. the U.S. reduces tariffs on imports
c. low-wage nations impose tariffs on U.S. made goods
d. labor productivity is higher in the low-wage nation
e. labor productivity is higher in the U.S.
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