With successful collusion that maximizes the total profits of the firms in the market,
a. the market demand curve shifts leftward
b. monopoly power allows the sellers to charge whatever price they want for their joint output level
c. each firm faces a horizontal demand curve for its output
d. each firm can sell as much output as it chooses at the price set by the cartel
e. the pricing decision is constrained by the market demand curve
E
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When economists say scarcity, they mean:
a. there are only a limited number of consumers who would be interested in purchasing goods. b. the human desire for goods exceeds the available supply of time, goods and resources. c. most people in poorer countries do not have enough goods. d. goods are so expensive that only the rich can afford it.
If the price elasticity of demand for a good is -0.8 and quantity demanded decreases by 40%, price must have
A. decreased by 20%. B. increased by 32%. C. increased by 5%. D. decreased by 32%. E. none of the above
According to the Taylor rule, if inflation in the last year was 6% and output was 2% below its full-employment level, the nominal Fed funds rate should be
A) 3%. B) 5%. C) 7%. D) 9%.
Food rationing during World War I under the wartime food administration featured
a. voluntary calls for "Meatless Mondays" and "Wheatless Wednesdays." b. a broad policy of direct controls on prices set by the Food Administrator. c. rationing for all food products except sugar. d. a pervasive belief that fear of government retribution, rather than appeals to moral principles, was key to reducing consumption, and maintaining food surpluses for export.