AutoCorp is a reputed automobile manufacturer while SUVmart is an independent distributor who buys automobiles from the former. During the current year, SUVmart wants to buy its quota of 250 Rhinos from AutoCorp. For the quota system to work efficiently, AutoCorp must commit credibly to the:
A. retail price.
B. double markup.
C. exclusive territory.
D. wholesale price.
Answer: D
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The circular flow of income assumes that
A) the national income accounting approach is not an adequate way to measure the economy's performance. B) profit is not a cost of production. C) goods and services flow in one direction and money payments flow in the other. D) total income is the sum of the value of intermediate goods and final goods and services.
Price leadership
a. is a form of explicit collusion b. works only when firms have dominant strategies c. is a form of tacit collusion d. reduces long-run economic profit for individual firms e. rarely is effective in setting prices in oligopolistic markets
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
The farmers in Country A harvest and sell 150 tons of rice at the price of $80 per ton. Of the total produced, 30 tons are exported. If the government bans all exports of rice, the domestic price of rice would drop to $60. But the production and sales would also drop to 120 tons. How much loss would the domestic farmers incur due to the export ban? Use a graph to illustrate your answer.
What will be an ideal response?