Boeing and Airbus have entered into a cartel agreement that will enable them to boost their profits. What occurs if Boeing decides to cheat on the agreement?
i. Boeing lowers the price of its airplanes.
ii. The total industry output increases.
iii. The total profits in the airplane industry will decrease.
A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii, and iii
E
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What is the assumption underlying public-choice theory?
A) Elected officials believe in cooperating with one another and they seek to avoid competition among themselves. B) The costs and benefits of being efficient are the same whether one is in the private sector or in the public sector. C) Individuals act within the political process to improve their own individual well-being. D) Resources in the public sector are not scarce.
FICA, the tax that supports Medicare and Social Security, is generally:
A. proportional. B. progressive. C. regressive. D. a flat tax that adjusts with inflation.
Suppose you make jewelry. If the price of gold falls, then we would expect you to
a. be willing and able to produce less jewelry than before at each possible price. b. be willing and able to produce more jewelry than before at each possible price. c. face a greater demand for your jewelry. d. face a weaker demand for your jewelry.
Sectoral shifts in demand for output
a. create structural unemployment. b. immediately reduce unemployment. c. increase unemployment due to job search. d. do not affect demand for labor.