The duopoly price provides a greater incentive to maintain cartel pricing than does the grim- trigger strategy.
Answer the following statement true (T) or false (F)
False
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Unemployment is good from a social point of view because
A) it keeps wages in check. B) it allows for better matches between workers and firms. C) it provides free time. D) it keeps the least efficient workers out.
A normal good has a ________ income elasticity of demand and quantity demanded ________ as income rises
A) negative; increases B) negative; decreases C) positive; increases D) positive; decreases
If a market basket is changed by adding more of at least one good, then rational consumers will:
A) rank the market basket more highly after the change. B) more likely prefer a different market basket. C) rank the market basket as being just as desirable as before. D) be unable to decide whether the first market basket is preferred to the second or vice versa. E) have indifference curves that cross.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower