Cartels are difficult to maintain in the long run because:
A. they are illegal in all industrialized countries.
B. individual members may find it profitable to cheat on agreements.
C. it is more profitable for the industry to charge a lower price and produce more output.
D. entry barriers are insignificant in oligopolistic industries.
Answer: B
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The firm's short run supply curve is equal to the
A) entire marginal cost curve. B) marginal cost curve above the AVC curve. C) marginal cost curve above the ATC curve. D) marginal cost curve above the AFC curve.
Excess reserves equal
A) total reserves less required reserves. B) required reserves less total reserves. C) total reserves plus required reserves. D) required reserves divided by total reserves.
Central bank lending to bail out troubled firms is known as ________, while allowing troubled firms to conceal the true value of their assets is called ________
A) crony capitalism; larceny B) liquidity provision; regulatory forbearance C) securitization; nonconventional monetary policy D) subprime lending; regulatory arbitrage
Perfectly competitive markets:
A. are more of an idealized model economists use than a real-life occurrence. B. are the most common type of market in the United States. C. tend to have relatively few buyers. D. tend to have relatively few sellers.