Which of the following helps in preventing firms in the U.S. from forming collusive agreements?
A) The low demand faced by colluding firms
B) The antitrust policy of the government
C) The high rate of corporate income taxes
D) The low profit earned by firms after colluding
B
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If the MPC equals 0.80 then:
a. the MPS equals 1.20. b. the multiplier equals 0.20. c. the multiplier equals 1 divided by 0.80. d. the multiplier equals 5. e. none of these.
If a 1 percent decrease in the price of one good generates a 3 percent increase in the quantity demanded for another good, then the
a. two goods are complementary b. cross elasticity between the two goods is positive c. two goods are substitutes d. price elasticity of demand for the good whose quantity demanded increased must be inelastic e. price elasticity of demand for the good whose quantity demanded increased must be elastic
Raiman's Shoe Repair also produces custom-made shoes. When Mr. Raiman produces 12 pair a week, the MC of the twelfth pair is $64, and the MR of that unit is $70 . What would you advise Mr. Raiman to do?
a. shut down b. produce more custom-made shoes c. stay at 12 pairs a week d. produce fewer custom-made shoes e. decrease price
GDP would be a better measure of economic well-being if it included:
A. the value of leisure. B. the market value of final goods. C. the costs of education. D. the total value of intermediate goods.