Refer to Figure 17.4. A long-run increase in productive capacity for the economy can be illustrated by a move from point
A. E to point A.
B. A to point B.
C. A to point C.
D. C to point D.
Answer: C
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China, the last large communist society,
A. has proved that a command economy has far less pollution problems than capitalist economies. B. has urban smog levels higher than Los Angeles. C. has the world’s most sophisticated pollution-control devices. D. has lowered its level of pollution dramatically since 1980.
In a partnership, debts accumulated by one partner
A) are the responsibility of that partner only. B) are the responsibility of the other partners as well. C) are the responsibility of all the employees of the partnership, regardless of whether those employees are partners. D) are the responsibility of the other partners only up to the amount each partner initially invested in the partnership.
As the housing bubble collapsed, and the value of homes decreased, consumers’ loss of wealth led to:
A. decreased consumption, which increased prices, which increased the costs of production, leading to more job loss. B. decreased consumption, which further depressed prices, which reduced output further, leading to more job loss. C. increased consumption, which increased prices, which increased the costs of production, leading to more job loss. D. decreased consumption, which further depressed prices, which decreased the amount people had to spend, and increased savings.
Answer the following questions true (T) or false (F)
1. A prisoner's dilemma leads to a noncooperative equilibrium. 2. A member of a cartel earns more profits by producing more than its quota and selling at a price higher than the cartel's price. 3. Collusion is common in oligopoly and monopolistically competitive industries.