The incentive to cheat is strong in a cartel because:
A. there is a significant lack of government regulation of cartels, especially those in worldwide production.
B. each firm can increase its output and thus its profits by cutting price.
C. the marginal revenue for an individual firm is greater than marginal cost at the profit-maximizing price set by the cartel.
D. the costs of production are the same for each firm, but the product demand differs.
Answer: B
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Discuss how economists measure the following: (i) aggregate expenditure, (ii) aggregate income, and (iii) aggregate output
What will be an ideal response?
If the demand curve facing a monopoly was 1 unit at $7, 2 units at $6, 3 units at $5, 4 units at $4, and 5 units at $3, the marginal revenue from selling the third unit of output:
a. is $5. b. is $4. c. is $3. d. is $1.
Suppose we were analyzing the Turkish lira per euro foreign exchange market. If The Euro-Area's risk level falls relative to Turkey and nothing else changes, then the:
a. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro. b. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market falls, causing an uncertain change in the value of the euro. c. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro. d. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. e. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro.
Diminishing marginal returns implies
A) decreasing average variable costs. B) decreasing marginal costs. C) increasing marginal costs. D) decreasing average fixed costs.