Which of these statements about cartel pricing power is true?
A. The larger the share of world production controlled by the cartel, the higher the price set by the members will be.
B. The more inelastic the market demand for the cartel's product, the lower will be the price that the cartel members can charge to maximize profits.
C. The larger an unexpected increase in unsold inventories is, the higher the price set by the cartel members will be.
D. The greater the elasticity of supply of the non-cartel members, the higher the price set by the cartel members will be.
Answer: A
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Producing paper creates pollution. There is no externality in the consumption of paper. The efficient quantity of paper is when the
A) marginal social benefit of paper is equal to zero. B) marginal social cost of the pollution from making paper is equal to zero. C) marginal social benefit of paper is equal to the marginal social cost of paper. D) marginal private cost of the pollution from making paper is equal to zero.
Holding supply constant, an increase in demand will
A) increase both the quantity and price. B) increase the equilibrium price and decrease the equilibrium quantity. C) decrease the equilibrium price and increase the equilibrium quantity. D) decrease both the quantity and price.
Use the figure below to answer the following question.
What is the amount of government revenue after the government imposes the excise tax on the market?
A. $540 B. $162 C. $486 D. $144
Which of the following would NOT shift an industry's supply of labor curve?
A. Wage rates in other industries fall. B. Working conditions within the industry become less desirable. C. Wage rates in industries using similar labor rise. D. The wage rate in the particular industry falls.