Being a member of a cartel is similar to being in a Prisoner's Dilemma situation because
a. each firm is being held hostage by the decisions of the other firms.
b. of anti-trust laws which make price fixing a criminal offense.
c. to obtain the best possible outcome for all, an enforcement mechanism is needed.
d. of the presence of organized crime in industries with cartels.
c. to obtain the best possible outcome for all, an enforcement mechanism is needed.
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Comparatively speaking, buildings are more likely to be physically ________ in regions where land prices are relatively ________
A) taller; low B) shorter; high C) taller; high D) shorter; stable
If price is less than the average variable cost, firms that seek to maximize profit should shut down
a. True b. False Indicate whether the statement is true or false
Suppose that a firm produces both steel and electricity. It is cheaper for this firm to produce both goods than it would be if they were produced by two separate firms. Further, as this firm increases its production levels of both products, the average cost of producing steel rises, while the average cost of producing electricity remains constant. This firm experiences:
A. economies of scope, diseconomies of scale in the production of steel and constant returns to scale in the production of electricity. B. economies of scope, economies of scale in the production of steel and constant returns to scale in the production of electricity. C. diseconomies of scope, economies of scale in the production of steel and constant returns to scale in the production of electricity. D. diseconomies of scope, diseconomies of scale in the production of steel and increasing returns to scale in the production of electricity.
If coal and oil are substitute inputs in the production of electricity, an increase in the price of oil
a. will increase the demand for coal. b. will reduce the demand for coal. c. will increase the supply of coal. d. will reduce the supply of coal. e. will not affect the demand for coal.