What is a cartel?
What will be an ideal response?
A cartel is a group of firms that cooperate with each other to set prices higher than they would if they competed with each other. Explicit price fixing is illegal in the United States, so cartels are difficult to maintain. They are also difficult to maintain because each firm in the cartel has an incentive to cheat on the arrangements made by the cartel.
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If U.S. exports exceed U.S. imports and official reserves do not change, the United States
A) borrows from the rest of the world. B) makes loans to the rest of the world. C) borrows from the U.S. government. D) cannot sell any capital to foreigners. E) makes loans to the U.S. government.
Which of the following is a lesson from the Condorcet paradox?
a. If voters are choosing a point along a line, then majority rule will pick the most preferred point of the median voter. b. Under certain conditions, there is no scheme for aggregating individual preferences. c. When there are more than two options, deciding the order in which to vote can have a powerful influence over the outcome of an election. d. Majority voting always indicates what outcome a society really wants.
Many detrimental externalities occur because
A. persons do not pay the full social cost of using a resource. B. persons do not pay the full private cost of using a resource. C. companies do not pay the market price for natural resources. D. companies pay more than the full social cost of using a resource.
Refer to Figure 8.2 above. The total fixed costs for The Barber Shop are $3,000. If The Barber Shop produces 300 hair cuts, the average fixed costs are A) $.20. B) $5. C) $10. D) $100.