A group of firms that has entered into a collusive agreement to restrict output and increase prices and profits is called
A) a compliance.
B) a cartel.
C) an oligopoly.
D) a duopoly.
B
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Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 400 and WR = 100 and the probability of drought is 0.75. Brandon's certainty equivalent is:
A. 250 units of water. B. 306.25 units of water. C. 18.75 units of water. D. 17.5 units of water.
Americans choose cola over other flavors 70 percent of the time. Analysts say this is because cola's flavor is more robust and durable. Orange soda, for example, suffers from flavor fatigue faster than cola. Also, because cola contains caffeine, people may be addicted to the stimulant. Which panel in Figure 5-1 best illustrates these facts?
a. 1
b. 2
c. 3
d. 4
Which of the following is an advantage of using money as a medium of exchange?
A) It simplifies purchases because all prices are specified in money values. B) There is no interest charged on using money for purchases. C) It is easy to mass produce money. D) It avoids having to rely on barter, the exchange of one good or service for another.
How would each of the following events affect the level of employment and the real wage rate? Explain which curves in the labor market diagram would be affected and show your work.(a)The stock market falls sharply.(b)A war destroys a substantial amount of a country's physical capital. (c)A new law reduces immigration of workers into the country.
What will be an ideal response?