In the circular flow model, households supply resources such as labor services in the product market
Indicate whether the statement is true or false
FALSE
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An oligopolistic firm that is part of a collusive agreement is less likely to cheat
a. the more punishment it expects if the cheating is detected b. the lower is the possibility of detection c. the less likely is the collapse of the entire agreement as a result of cheating d. the greater is the additional profit from charging a lower price than the other firms e. the higher is the chance of taking customers away from competitors by charging a lower price
The forces of demand and supply ensure that at equilibrium
A. there are no shortages or surpluses. B. there are no shortages, but there may be surpluses. C. there are no surpluses, but there may be shortages. D. there may be shortages or surpluses.
If the government imposes a price ceiling that is lower than the market clearing price, then
A) consumer surplus will increase while producer surplus will decrease. B) consumer surplus will decrease while producer surplus will increase. C) both consumer surplus and producer surplus will decrease. D) both consumer surplus and producer surplus will increase.
A characteristic found only in oligopolies is
A) break-even level of profits. B) interdependence of firms. C) independence of firms. D) products that are slightly different.