A cartel behaves like
A. a monopolist.
B. an oligopolistic firm.
C. a perfectly competitive firm.
D. a monopolistic competitive firm.
Answer: A
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If the autarkic and world relative prices are equal, then
a. consumers are better off with trade than without trade. b. the country has the option of supplying either good in the world market. c. no gains from trade are possible. d. the world markets are not in equilibrium.
In the above figure, CBL is the cost of breaking the law. If the good in the figure is made illegal and penalties are imposed on both buyers and sellers, then its price per unit
A) will be higher than if it was not illegal. B) will be lower than if it was not illegal. C) will be the same as when it was not illegal. D) cannot be compared with its price when it was legal.
Assuming zero transactions costs, if your local grocer buys oranges at a low price from an orchard and resells them to you at a higher price, then the grocer's revenue minus costs is known as
A) transactions profits. B) pure profits. C) excess profits. D) arbitrage profits.
What impact does an increase in price have on consumer surplus?
a. Increases it b. Decreases it c. Depends on the amount of the price change d. Will not affect consumer surplus