A decrease in the interest rate reduces the opportunity cost of holding money
a. True
b. False
A
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Cartels are typically subject to cheating by their members because
A) if the other firms stick to the agreement, a firm can increase its profits by cutting its price. B) barriers to entry do not exist so new entrants will join. C) the U.S. Justice Department will punish any cartel agreement before the cartel has had a chance to operate. D) product differentiation allows the firms in the cartel to cheat.
The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes $350 per month as the legal maximum rent, the consumer's net gain in surplus equals
A) c - f. B) b - f. C) d - f. D) The answer cannot be determined from the information given.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50The expected value of project C is:
A. $10. B. $20. C. $5. D. None of the answers are correct.
New investors are not attracted to an industry and current ones are not exiting the industry if firms in the industry are
A. suffering an economic loss. B. earning an economic profit. C. earning an accounting profit. D. breaking even.