An example of a nontradable good is a:
A. bottle of wine from a remote valley in France.
B. rare gemstone found in South Africa.
C. haircut by a renowned Italian hairstylist in Florence.
D. good that has no legal restriction placed on it.
C. haircut by a renowned Italian hairstylist in Florence.
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Cooperation is difficult to achieve in a Prisoners' Dilemma because each player thinks the other player might not cooperate.
Answer the following statement true (T) or false (F)
Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) One of the firms may decide to lower its price and take business away from the firm that charged the high price. B) The firms may find that the price they charge is greater than the price that would maximize their profits. C) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail. D) Consumers may resent having to pay high prices and not buy from either of the firms.
If a company plots its total profit curve, it would show
A. that the curve has a negative slope over the entire range of output. B. that the slope of the curve is negative, then zero and then becomes positive as output increases. C. that the slope of the curve is positive, then zero and then becomes negative as output increases. D. that slope is a constant at a value of one.
Diseconomies of scale exist over the range of output for which the long-run average cost curve is:
a. constant. b. falling. c. rising. d. subject to diminishing returns.