If a firm perceived that the other firm in an implicit pricing agreement dropped its price in an attempt to gain market share, then its most likely response would be to:
A. merge with the other firm.
B. engage in a price war.
C. raise price to punish the other firm.
D. keep its price the same.
Answer: B
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The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then
A) the market is in equilibrium. B) there is a surplus and the price of t-shirts will fall. C) there is a shortage and the price of t-shirts will fall. D) there is a shortage and the price of t-shirts will rise. E) there is a surplus and the price of t-shirts will rise.
The equilibrium level of regulation is where the marginal political benefits to the special interests are equal to the marginal political costs of the foregone regulation
a. True b. False
In the simplified circular flow diagram, leakage can occur when consumers save some income
a. True b. False Indicate whether the statement is true or false
Unemployment statistics are often criticized for
A. overstating the number of people out of work, because retirees are included in the statistics. B. understating the number people out of work, because full-time college students are excluded. C. understating the number of people out of work, because discouraged workers are excluded in the statistics. D. overstating the number of people out of work, because the unemployment statistics include all low-income workers.