The prisoner's dilemma provides an explanation for
a. the price wars that sometimes occur in oligopolies
b. the ability of firms in an oligopoly to extract the entire consumer surplus
c. the collusive behavior that sometimes occurs in an oligopoly
d. the failure of firms in non-competitive industries to maximize profits
e. an irrational behavior that occurs in competitive markets
A
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Consider a mutual fund with a 6 percent back-end load that decreases to 0 percent in the seventh year. How much of the load will an investor have to bear if she sells it off in the second year?
a. 4 percent of the load b. 3 percent of the load c. 6 percent of the load d. 5 percent of the load e. 2 percent of the load
An effluent fee is a
A. charge for a public good. B. charge to a polluter that gives the right to discharge pollution into the air. C. fine imposed on a polluter for dumping illegal pollution. D. subsidy given to the producer of a positive externality.
The natural rate hypothesis suggests that improvements in technology that occur normally during the course of time will lead the economy to the natural rate of unemployment
a. True b. False Indicate whether the statement is true or false
In the short run, an increase in the price level induces firms to expand production because
A. higher prices allow firms to hire more inputs by offering higher prices for inputs, which increases productivity and profits. B. prices of inputs are held constant, so the higher prices for firms' products imply that it is profitable to expand production. C. each firm must keep its production level up to the level of its rivals, and some firms will expand production as the price level increases. D. they can increase profits by increasing maintenance costs.