When businesses cooperate and agree to hold prices high, it is called ____________, and when they reach a noncooperative equilibrium it is called _______________.
A. collusion; competition
B. competition; collusion
C. commitment strategy; collusion
D. collusion; commitment strategy
A. collusion; competition
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The figure below shows a firm that has two plants. Plant 1 has a marginal cost curve of mc1, plant 2 has a marginal cost curve of mc2, and the overall marginal cost curve is MC. Managers maximize their profit by producing ________ units at plant 1 and ________ units at plant 2.
A) 2 million; 4 million
B) 0; 5 million
C) 4 million; 5 million
D) None of the above answers is correct.
If the wage rate rises, labor's share in the total costs of a production process:
a. will increase. b. will decrease. c. may increase or decrease depending on the elasticity of demand for the product. d. may increase or decrease depending on the ease of substitution of other inputs for labor.
A drug interdiction program that successfully reduces the supply of illegal drugs in the United States likely will
a. raise the price, reduce the quantity, decrease total revenues, and decrease crime. b. lower the price, increase the quantity, increase total revenues, and increase crime. c. raise the price, increase the quantity, decrease total revenues, and increase crime. d. raise the price, reduce the quantity, increase total revenues, and increase crime.
Persons who choose not to become informed on political and governmental matters because they feel that the costs of becoming informed exceed the benefits of becoming informed are
A) rationally ignorant. B) not acting in their own best interests. C) members of special interest groups. D) shortsighted.