When firms discuss pricing strategies with each other:
A. it is a violation of antitrust laws.
B. it is not a violation of antitrust laws because laws cannot restrict free speech.
C. it is a violation of antitrust laws only if the discussion includes punishment strategies.
D. it is a violation of antitrust laws only if some firms in the industry are excluded from the discussion.
Answer: A
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Suppose there is a water shortage, and the governor proposes that the government distribute equal quantities of water to each person at no cost to the consumers
If consumers were forbidden to trade water, would such a distribution be Pareto optimal? A) Yes, because each person has the same amount of water as everyone else. B) Yes, because everyone would be receive their water for free. C) Not necessarily, as people may differ in their marginal rates of substitution between water and other goods. D) It is impossible to determine without knowing the price of water. E) none of the above
If all my savings are invested in my consulting company, an increase in interest rates increases my implicit costs
Indicate whether the statement is true or false
To maximize total surplus with a monopoly firm, a benevolent social planner would choose the level of output where
a. MR = MC. b. MR intersects the demand curve. c. MC intersects the demand curve. d. MR exceeds MC by the greatest amount.
Nominal GDP will definitely increase when
a. prices increase and output increases. b. prices increase and output decreases. c. prices decrease and output increases. d. All of the above are correct.