A major reason that firms form a cartel is to
A. enlarge the market share for each producer.
B. maximize joint profits.
C. reduce the elasticity of demand for the product.
D. minimize the costs of production.
Answer: B
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When a currency is undervalued, international reserves ________ and the country has a balance-of-payments ________.
A. decrease; surplus B. increase; deficit C. decrease; deficit D. increase; surplus
Some environmentalists have criticized tradable emission allowances on the grounds that they give permit holders a license to pollute
Furthermore, environmentalists argue that those who sell their permits receive a monetary benefit from their contribution to polluting the environment. Use economic reasoning to evaluate this criticism.
In a closed economy, aggregate demand is the sum of
A) consumer expenditure, actual investment spending, and government spending. B) consumer expenditure, planned investment spending, and government spending. C) consumer expenditure, actual investment spending, government spending, and net exports. D) consumer expenditure, planned investment spending, government spending, and net exports.
Claire was trying to decide if she should buy a share of stock in her favorite company or a bond issued by that same company. She discussed the dilemma with her father. Her father made the following five statements. All of them are accurate except for one. Which one is the exception?
a. "If you buy a share of stock you will own a piece of the company" b. "If you buy a bond you will own a piece of the company" c. "If you buy a bond and change your mind you can sell it on the secondary bond market" d. "You should be careful because if you buy a share of stock you could loose your original investment" e. "If you buy a stock it may be worth more in the future"