In well-functioning markets, all of the following reflect the degree of product variety except
A. gains from network externalities.
B. differences in consumers' tastes.
C. gains from coordination.
D. cost economies from standardization.
Answer: A
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Which of the following conditions can help prolong the life of a cartel?
A) There are only a few firms in the market and they all belong to the cartel. B) There are many firms in the market that are not members of the cartel. C) It is difficult to know what price any cartel member is actually charging. D) The cartel has no ability to punish members who cheat on the cartel.
The size of the reduction in quantity of labor hired by a firm due to an increase in the wage rate depends upon all of the following except:
a. what percentage of total costs are made up of labor costs. b. how much quantity demanded in the output market will be reduced by a higher price. c. the capital to labor ratio before the wage increase. d. how easily other inputs can be substituted for labor.
If people buy less chewing gum at every price when their incomes fall, then:
a. chewing gum is a normal good. b. the demand for chewing gum is positively sloped. c. demand for chewing gum has increased. d. the price of chewing gum has increased. e. there has been a decrease in population that changed demand.
Which of the following would most likely reduce the number of bank failures?
a. an increase in the number of small banks b. tighter restrictions on interstate banking c. creating a system of deposit insurance d. encouraging banks to make more risky loans