Which of the following reflects the incentive structure confronted by a typical firm in a cartel?
a. If I alone cheat, I'm better off; if everyone cheats, I'm worse off.
b. I can never do better for myself than by following agreed-upon cartel policies.
c. If everyone cheats, I'm better off and so is everyone else in the cartel.
d. If I suspect others are planning to cheat, I'll do best for myself by deciding not to cheat.
A
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Declining-block quantity discrimination makes sense if
A) buyers of smaller quantities are more price sensitive than buyers of larger quantities. B) buyers of smaller quantities are less price sensitive than buyers of larger quantities. C) demand for the good is perfectly elastic. D) the lower price for larger quantities encourages all consumers to purchase the larger quantity.
Which of the following is most likely to be a fixed input in the short run for Joe's Garage?
a. the grease used to lubricate cars b. the part-time labor employed to repair cars c. the inventory of replacement parts d. the electricity used to heat and light the garage e. the garage used to repair cars
Under the gold standard of a century ago, the world's commerce
a. nearly collapsed before the beginning of World War I. b. was at the mercy of gold discoveries. c. grew steadily without interruption from monetary disturbances. d. grew when the gold stock grew slowly, and shrank when gold discoveries increased.
Which of the following provides the foundation of the case for free trade?
What will be an ideal response?