Why do oligopolists (or cartel members) have an incentive to cheat on collusive agreements designed to maximize the joint profits of the firms in the industry?
a. Individual firms could gain if they charged a price greater than the industry's profit-maximizing price.
b. The industry demand curve is more elastic than the demand curve confronting each of the firms in the industry.
c. The firms would like to see the industry produce a larger output and charge a lower price.
d. The demand curve confronting the individual firms is more elastic than the market demand curve for the product.
D
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Lack of investment in strong education and health care systems
A) causes a deterioration in human capital and a decline in labor productivity. B) causes a deterioration in human capital and an increase in physical capital. C) causes a decline in physical capital and a decline in labor productivity. D) increases human capital and cause a decline in labor productivity.
When a quota/trade barrier is instituted, the loss of domestic consumer surplus may be transferred to all of the following except
a. foreign consumers. b. domestic producers. c. foreign producers. d. consumers of other domestic products.
Demand-pull inflation is most pronounced during a recession (as opposed to the recovery phase of the business cycle)
a. True b. False Indicate whether the statement is true or false
Free markets produce allocatively efficient outcomes and have no flaws.
Answer the following statement true (T) or false (F)