An association of producers in an industry that agree to set common prices and output quotas to prevent competition is
A) an oligopolist.
B) a monopolistic competitor.
C) a constrained monopoly.
D) a cartel.
Answer: D
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Proponents of the ________ model argue that the short-run supply curve is vertical
A) the monetarist model B) the new classical model C) the new Keynesian model D) the real business cycle model
How does the lender of last resort potentially create a moral hazard problem?
What will be an ideal response?
The idea that the production function exhibits _______implies that ________
A) increasing returns; output should increase steadily as technology grows B) constant returns; each additional unit of labor employed generates an increasing amount of real GDP C) diminishing returns; the Lucas Wedge increases at output increases D) increasing returns; potential GDP is always increasing E) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP
A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
A) a public good. B) a merit good. C) an externality. D) the free-rider problem.