Answer the following statement(s) true (T) or false (F)
1. The firms in a cartel act together to achieve a similar outcome as a monopolist.
2. Consumers are the primary beneficiaries of collusive oligopoly due to lower prices.
3. The more firms in a cartel, the more difficult it is for all the firms to reach consensus.
4. Collusive oligopolies are strictly illegal under U.S. antitrust laws.
5. Price leadership involves formal meetings between the price leader and the price followers.
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
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Which of the following statements is FALSE?
A) The rationing function of prices is not allowed to freely operate when the government imposes price controls. B) Price controls may take the form of price ceilings or price floors. C) Price ceilings below the equilibrium price can cause black markets to develop. D) Rent controls are examples of price floors.
Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25 and that a student's beverage budget is $20 per week. What is the most cups of tea the student could buy?
a. 20 b. 16 c. 10 d. 8
An example of an automatic stabilizer is:
A. increased unemployment rates cause the government to pay out more in unemployment insurance. B. increased tax revenues due to nominalincome going up during a boom. C. reduced unemployment rates during a boom means more people working, and the government pays less out in food assistance. D. All of these are examples of automatic stabilizers.
In the most basic model presented in the text, when aggregate expenditures cross the 45-degree line,
a. saving equals intended investment b. saving is greater than intended investment c. saving is less than intended investment d. saving equals consumption e. saving equals inventories