When firms in an industry reach an agreement to fix prices, divide up market share, or otherwise restrict competition, they are practicing the strategy of
A. price leadership.
B. collusion.
C. interindustry competition.
D. limit pricing.
Answer: B
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Critics of advertising argue that it:
a. lowers price by increasing competition. b. results in more variety of products. c. establishes brand loyalty, which promotes competition. d. serves as a barrier to entry for new firms.
Which of the following does consumption rely on to provide goods and services:
A. Producers B. Consumers C. Owners D. Deciders
Which of the following statements is true of capital gains in the U.S.?
A. Capital gains are taxed only if they are long-term. B. Capital gains are taxed only for low-income groups. C. Capital gains are taxed on accrual. D. Capital gains are forgiven at death.
Risk-averse persons sometimes prefer to play some gambles even if they know that those gambles are not fair, i.e., on average people lose by playing them. One plausible explanation for this seemingly paradoxical phenomenon is that:
A. Gambling has entertaining effects which are not treated explicitly as part of the payoffs. B. People's actions are not reasonable. C. The economic theory of uncertainty is not correct. D. None of the statements is correct.