If OPEC is an effective cartel,
A. its members set Price =MC.
B. its members set Price=MR.
C. members agree on output quotas.
D. oil prices will be lower than if the market functioned competitively.
Answer: C
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Under the cartel, the individual firm's quantity is (assuming that it wants to cheat on its quota) 
Figure 42.2
A. Q1. B. Q2. C. Q3. D. Qb.
In the case of nonexcludable goods, economists contend that the market ___________ produce these goods because of the ________________________.
A. will; free rider problem B. will not; law of diminishing marginal utility C. will not; law of diminishing marginal returns D. will not; free rider problem.
If the price of pizza increases, the quantity of pizza demanded will fall because some consumers will switch to tacos, hamburgers, or submarine sanwiches. This is called the:
a. income effect b. the alternative effect c. the substitution effect d. the normal good effect
The amount that households have accumulated out of past income through saving and inheritance is
A. present income. B. consumption. C. wealth. D. future income.