Cartel power is weakened by the tendency for
A. the cartel members to decrease output below their production quotas.
B. the cartel members to increase output above their production quotas.
C. demand for the cartel's product to increase over time.
D. non-members to join a successful cartel.
Answer: B
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Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6. What does this mean?
A) A 1 percent decrease in the price of grapefruit juice leads to a 6 percent increase in orange juice consumption. B) A 6 percent increase in the price of grapefruit juice leads to a 1 percent increase in orange juice consumption. C) The demand for orange juice is 6 times greater than the demand for grapefruit juice. D) If the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased.
Economic growth is shown by
A) a point near the top of the production possibilities curve. B) a point outside the production possibilities curve. C) an inward shift of the production possibilities curve. D) an outward shift of the production possibilities curve.
Which of the following is a disadvantage of the corporation compared to the sole proprietorship?
a. limited liability b. difficulty raising start-up money c. lack of profitability d. corporate income is taxed twice e. corporations are more vulnerable in the case of the death of an owner
Allocative efficiency occurs in markets when
a. goods are produced using the least amount of society's scarce resources b. goods are produced at the lowest possible average total cost c. goods are produced at the lowest possible marginal cost d. the value to society of the last unit produced equals its marginal cost e. the value to society of the last unit produced is greater than its marginal cost