After participating members of a cartel form an agreement on common prices and output quotas, then an individual firm can increase its own profits by
A) increasing production.
B) increasing prices.
C) leaving the cartel.
D) incurring higher input costs.
Answer: A
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The coupon rate on newly issued bonds is usually higher for bonds with ________ terms and ________ risk that the borrower will go bankrupt.
A. shorter; greater B. shorter; smaller C. longer; smaller D. longer; greater
A perfectly competitive firm definitely will shut down in the short run if its price is below its average total cost
Indicate whether the statement is true or false
The current account deficits incurred by the United States in the 1990s and early 2000s were caused, in the opinion of many economists, by
A) federal budget deficits. B) a sharp decline in private saving. C) "flight to quality" as foreign investors favored U.S. investments. D) Both B and C are correct.
A singer would willingly perform in a concert for $100,000. If she is paid $500,000 for the concert, she is
A) receiving $500,000 to cover her opportunity cost. B) not being paid her full opportunity cost. C) receiving $400,000 of economic rent. D) certainly being paid more than warranted by the level of demand.