Graph How many cars (in thousands) will this country import in a trading (open) economy situation?
a. 20
b. 40
c. 60
d. 80
b. 40
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AIG almost went bankrupt in 2008 because
A) the value of the securities underlying its credit default swaps declined significantly. B) it lacked the collateral required by buyers of its credit default swaps. C) prices of securities underlying their credit default swaps were hard to determine since they were no longer actively traded. D) all of the above.
A cartel is: a. a group of oligopolists who try to behave like a single monopolist and split the benefits among themselves. b. a government-approved organization for the exchange of technical information among firms
c. an industry trade group formed to lobby political leaders d. a regulated industry manufacturers association that is officially permitted to set the price of its product above long-run average total cost.
Which of the following helps encourage specialization?
a. property law b. criminal law c. contract law d. tort law e. constitutional law
Pie-Oh-My, a monopolistically competitive firm, is producing 80 gourmet pies per day and selling each pie for $32. At that production level ATC is $40, AVC is $30, AFC is $10, and both MR and MC are $16. In the short run, this firm should
A. increase output to the point where price equals marginal cost. B. shutdown and produce zero pies and pay fixed costs. C. decrease output to the point where price equals average total cost. D. continue to produce 80 pies, as price is greater than AVC.