A collusion can work if ________
A) a colluder can cheat without being detected
B) a colluder values future monopoly profits more than current profits
C) a colluder charges a price higher than his partners
D) a colluder gives secret price discounts
B
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An increase in the marginal factor cost of labor will
A) lead to an increase in the quantity demanded of labor. B) induce a firm to hire fewer workers. C) lead to an increase in the value of an additional worker. D) cause the value of the marginal product of labor to increase.
Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply:
A. increases $100,000. B. increases $500,000. C. increases $600,000. D. decreases $500,000.
The concept of a "political business cycle" suggests that a possible cause of macroeconomic instability is due to the use of fiscal policy for political purposes.
Answer the following statement true (T) or false (F)
A U.S. firm currently produces 200 units of output according to the production function q = L0.5K0.5 and faces input prices equal to wU.S. = rU.S = $11. Should the U.S. firm move their company abroad where they will face input prices equal to wabroad = $6.50 and rabroad = $15.00?
A) Yes, because the total costs will fall from $3,859 to $2,810. B) No, because the total costs will increase from $2,810 to $3,859. C) No, because the firm has decreasing returns to scale. D) Not enough information is given to answer this problem.