CAFE standards, which set fuel efficiency standards that automakers must meet, are an example of what type of energy conservation?
A. A command-and-control approach
B. A negative externality
C. A normal market response
D. A market-based approach
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. The Stackelberg equilibrium of a sequential game must also be a Nash equilibrium. 2. In a sequential game, guaranteed commitment to a strategy will make a player worse off. 3. A merger between Gateway, a manufacturer of computers, and Logitech, a manufacturer of components for computers, would be an example of horizontal integration. 4. The Sherman Act of 1890 and the Clayton Act of 1914 gave courts the power to prevent mergers that reduce competition and provided clear criteria to apply in determining when a merger would do so. 5. Social welfare consequences are ambiguous when two or more manufacturers merge to take advantage of economies of scale.
If the price of cotton used in making blue jeans increases, which of the following will occur?
A) There will be a movement along an unchanged supply curve for jeans. B) The supply curve for jeans will shift rightward. C) The supply curve for jeans will shift leftward. D) There will be a rightward shift in the supply curve for jeans, followed by a movement along the supply curve.
Consider the accompanying payoff matrix.
If Row Resorts offers reduced rates, then Column Cruises would receive the highest payoff if it:
A. kept its rates high. B. choose either strategy because it will have the same payoff in either case. C. entered into a cartel with Row Resorts and agreed to jointly reduce rates. D. offered reduced its rates.
If a pure monopolist can engage in price discrimination:
A. marginal revenue will become less at each level of output than it would be without price discrimination. B. the firm will face multiple marginal revenue curves. C. the marginal revenue curve will now shift to a position above the demand curve. D. the marginal revenue curve and the total revenue curve will then coincide.