Most cartels cease to be effective because:
A. consumers discover the cartel and buy from other firms instead.
B. the dominant firm buys out the other firms.
C. of the incentive to cheat on the cartel agreement.
D. of strict enforcement of antitrust legislation.
Answer: C
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The primary difference between an import tariff and an import quota is that
a. tariffs cause prices to rise, but quotas do not b. quotas cause prices to rise, but tariffs do not c. tariffs result in a net welfare loss, but quotas do not d. quotas result in a net welfare loss, but tariffs do not e. tariff revenues go to government, but quotas benefit those with the right to sell foreign goods domestically
Which of the following is an implication of the law of diminishing returns?
a. Total output will decline as more workers are hired. b. In the long run, average total cost will eventually decline as output is expanded. c. In the short run, expansion of output will eventually lead to increases in marginal cost and average total cost. d. A doubling of all inputs will lead to more than a doubling of output.
A dramatic increase in the birth rate will have what immediate effect on the disposable diaper market?
a. supply decreases now b. supply increases now c. demand decreases now d. demand increases now e. supply and demand stay the same now
Which of the following will most likely occur in the short run when the long-run equilibrium of an economy is disturbed by an unanticipated decrease in aggregate demand?
a. a decrease in output and a higher price level b. an increase in output and a higher price level c. a decrease in output and a lower price level d. an increase in output while prices remain unchanged