Suppose an oil cartel has an agreement to restrict members' production in order to maintain a price of $30 per barrel. A single cartel member may want to cheat and exceed its quota so that it can:
A. reduce its costs.
B. charge higher prices.
C. make demand more inelastic.
D. earn a bigger profit.
Answer: D
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Suppose you are risk neutral and you are deciding between two investments. One has a guaranteed return of 2% while the second has a 60% chance of a 10% return and a 40% chance of a -5% return. Which investment would you choose? Why?
What will be an ideal response?
Consumers receive more consumers' surplus when __________
A) tariffs exist. B) tariffs and quotas do not exist. C) quotas exist. D) a and c
The figure below shows a single consumer's demand for ice cream at the student union.
During a regular semester, there are 500 students on campus. Each student's weekly demand for ice cream is shown above. When the price of ice cream is $2.00 per scoop, those 500 students purchase a total of ________ scoops per week from the student union.
A. 2,500 B. 3,000 C. 2,000 D. 5,000
What will the investment schedule look like if equilibrium output is $500 billion, spending multiplier is 5, and the government increases purchases by $10 billion. If new equilibrium output increases to $530 billion, the planned investment schedule most likely looks like:
A) down sloping and curved B) vertical C) horizontal D) upward sloping and curved