Should Governments always intervene to correct market failures?
Justify and explain your answer, with reference to two types of
market failure. (500 words minimum)
justify the following statements with appropriate examples.
Max Marks 10
a. WTO favors the trend in global business towards
deregulation.
b. U.S. corporations build plants abroad when they could build
them at home
c. FDI in a host country is far more risky and complicated than
exporting.
d. According to the product life-cycle theory, by the time a
product matures on the life-cycle a producer country also
eventually becomes an importing country.
e. If the value of Rupee depreciates against...
Was it appropriate for the US and Canadian governments to
subsidize the construction of their transcontinental railroads in
the way that they did? Why?
Barriers to entry are crucial in determining the market
structure. Discuss, with appropriate examples, government created
barriers to entry that businesses are likely to encounter in the
UAE market
3(b). One simple measure of a firm’s market power is the Lerner
index. Suppose a firm faces a demand curve defined as P=40, and
MR=40. Its marginal cost is given by MC=5+5Q. Compute its Lerner
index and explain the market structure it is operating in [3
marks].