What is a cartel?
What will be an ideal response?
A cartel is a group of firms acting together to limit output, raise price and increase economic profit. Cartels are illegal in the United States. Cartels operate in a market structure with oligopolies. If firms can stick to the cartel agreement, the firms can earn an economic profit. However, cartels tend to break down because firms are tempted to cheat on their cartel partners and increase their own profit at the expense of their partners.
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Willingness to pay:
A) is the lowest price that a buyer is willing and able to pay for a unit of good. B) is the highest price that a buyer is willing and able to pay for a unit of good. C) is equal to the price of the lowest-priced goods in a consumption bundle. D) is equal to the price of the highest-priced goods in a consumption bundle.
Early structural adjustment programs were least likely to include
a. social safety nets b. currency devaluations c. restrictions on money supply growth d. import liberalization e. most programs included all of these
When are black markets likely to arise?
A) when the government removes a price floor B) when the government enforces a price ceiling C) when there is a surplus of a good D) when the quantity supplied of a good exceeds the quantity demanded
The marginal productivity theory of distribution holds that
a. each factor is paid what it deserves. b. the owner of each factor is paid the amount that the factor contributes to earnings. c. each factor's income depends on how hard it works. d. each factor receives an equal share of the revenue from production.