Which of the following is NOT true about a cartel?
A) Members earn economic profits.
B) Members experience large economies to scale relative to industry demand.
C) Cartels will set common prices for their members.
D) Members of a cartel will have production quotas.
B
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Most people would prefer to drive a luxury car that has all the options, but more people buy less expensive cars even though they could afford the luxury car because
A) luxury cars cost a lot more than non-luxury cars. B) the marginal utility per dollar spent on the less expensive car is higher than that spent on luxury cars. C) car buyers are irrational. D) the total utility of less expensive cars is greater than that of luxury cars.
Returns to scale refers to the change in output when
A) all inputs increase proportionately. B) labor increases holding all other inputs fixed. C) capital equipment is doubled. D) specialization improves.
In the short run, which of the following would indicate that a perfectly competitive firm is producing an output for which it is receiving a normal profit?
A) P > AC B) AVC < P < AC C) P = AC D) P = AVC
Consider a PPC with automobiles on the vertical axis and cotton on the horizontal axis. The discovery of a new fertilizer that improves crop yield will shift:
a. the vertical intercept up but will not shift the horizontal intercept. b. the horizontal intercept to the right but will not shift the vertical intercept. c. the horizontal intercept to the left and the vertical intercept upward. d. the vertical intercept downward and the horizontal intercept to the right. e. neither the horizontal intercept nor the vertical intercept.