Relative to a competitively organized industry, firms acting collusively are more likely to produce
A. more output; charge higher prices, and earn economic profits.
B. less output, charge lower prices, and earn economic profits.
C. less output, charge lower prices, and earn only a normal profit.
D. less output, charge higher prices, and earn economic profits.
Answer: D
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The currency crisis of 1992 caused France and a number of other countries to choose between
A) a single currency for the EU and keeping their own currency. B) doing the right thing for their domestic economy and defending the exchange rate. C) lowering interest rates and reducing unemployment. D) competitive devaluations and falling unemployment. E) the Maastricht Treaty and the Single European Act.
Which of the following situations is represented by a nearly horizontal supply curve for a good?
a. Small price changes lead to small changes in quantity demanded of the good. b. Small price changes lead to small changes in quantity supplied of the good. c. Producers of the good are not operating efficiently. d. Producers of the good are not maximizing profit. e. Small changes in the price of the good lead to large changes in the quantity supplied of the good.
When a worker specializes in one task, he focuses on that one function in the production process, ignoring the whole system. This is likely to
A. increase the cross-training costs. B. result in functional myopia that reduces overall productivity. C. eliminate trade-offs since only one task is undertaken by each employee. D. lead to greater complementarity between one task and another.
Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are
a. included in current GDP because GDP measures the value of all goods and services sold in the current year. b. included in current GDP but valued at their original prices. c. not included in current GDP because it is difficult to determine their value. d. not included in current GDP because GDP only measures the value of goods and services produced in the current year.