Explain why firms in a cartel might lobby for government regulation.
What will be an ideal response?
Firms form cartels in order to restrict quantity and raise price, but they each have an incentive to over-produce. They would therefore welcome an outside enforcer to enforce the cartel agreement -- and might look to government regulators to accomplish this for them.
You might also like to view...
How are intermediate goods treated in the calculation of GDP?
A) Their value is counted separately, and their value is also included as part of the value of the final good for which they are an input. B) Their value is counted separately, but is not included as part of the value of the final good for which they are an input. C) They are included only if they are imported. D) Their value is not counted separately, but included as part of the value of the final good for which they are an input.
If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$50 / (1 + .08)3] + [$500 / (1 + .08)3]," which of the following is correct?
A) The face value is $500, the coupon is $50, and the coupon will mature in 3 years. B) The face value is $50, the interest rate you need is 8 percent, and the coupon will mature in 3 years. C) The coupon is $50, the interest rate you need is 1.08 percent, and the coupon will mature in 3 years. D) The face value is $500, the interest rate you need is 3 percent, and the coupon will mature in 8 years.
Recent research has shown that the first firm to enter a market often does not have a long-term advantage over later entrants into the market. An example that has been used to illustrate this is
A) Xerox, which became a generic term for making photocopies. B) McDonald's entry into the high-end coffee market. C) the introduction of the first ballpoint pen in 1945. D) Abercrombie and Fitch, which was the first clothing company to market to young men.
In 1947, which of the following activities were not made illegal for labor unions to do?
a. Coerce employees who are working at a firm to join a union b. Discriminate against employees c. Encourage employees to engage in a strike to force one employer to cease doing business with another employer d. Collect membership dues