A cartel member has the incentive to cheat on the cartel agreement because
a. it fears that other members may also cheat on the agreement.
b. the cartel prevents the member from charging the monopoly price.
c. undercutting the cartel price will increase the cartel member's profit.
d. the cartel outcome is not Pareto optimal for the cartel members.
c. undercutting the cartel price will increase the cartel member's profit.
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Unit root tests
A) use the standard normal distribution since they are based on the t-statistic. B) cannot use the standard normal distribution for statistical inference. As a result the ADF statistic has its own special table of critical values. C) can use the standard normal distribution only when testing that the level variable is stationary, but not the difference variable. D) can use the standard normal distribution but only if HAC standard errors were computed.
An increase in production possibilities is known as
A. Predictable growth. B. Factor expansion. C. Economic growth. D. Upward mobility.
To manufacture 1,000 pairs of shoes in a week, a firm must use at least 1,500 workers and 5 machines or 100 machines and 150 workers. Which method can be technically efficient?
A. 1,500 workers and 5 machines B. 150 workers and 100 machines C. Both D. Neither
Exhibit 5-9 Supply and Demand Curves for Good X
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As shown in Exhibit 5-9, the $200 per unit tax on Good X raises tax revenue per time period totaling:
A. $10,000. B. $20,000. C. $30,000. D. $60,000.