The New York Yankees are playing the Boston Red Sox at Fenway Park. It is the bottom of the ninth inning, the score is tied 4-4, the bases are loaded, and there are no outs
Starting in the seats closest to the field, the crowd begins to stand and cheer , hoping that the Red Sox can drive in one more run and win the game. Describe the collective action problem that has developed in this situation.
As the crowd in the seats closest to the field begins to stand, spectators behind those standing can no longer clearly see what is happening on the field, so they too must stand to see. This continues throughout the entire stadium until all spectators in the stadium must stand to be able to see over the people in front of them. Although many people in the stands may enjoy standing to cheer on their team in this situation, there may be some in the stands who would prefer to watch the game and remain seated. It is unlikely that spectators who want to stand would choose to forgo what they see as being in their best interest and choose to act in the best interest of the group by sitting down (so then everyone can then sit down and still see the action on the field). This is a collective action problem because sufficient numbers of people are acting in a way that makes everybody worse off.
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Which of the following is NOT a necessary condition for oligopoly?
A) barriers to entry B) strategic dependence of firms C) differentiated products D) either a small number of firms or market dominance by a small number of firms
An increase in price:
A. cannot cause a quantity effect. B. cannot cause a price effect. C. causes a decrease in revenue resulting from selling fewer units and a simultaneous increase in revenue resulting from receiving a higher price. D. causes an increase in quantity demanded.
A nonrenewable resource:
A. is a production input that comes from the earth. B. can be replenished naturally over time. C. is used to regenerate an old piece of capital. D. All of these statements are true.
Oligopolistic firms
A. are few in number. B. are interdependent. C. charge a higher price and produce a smaller output than perfect competitors. D. all of the choices are true of oligopolistic firms.