Why are cartels are difficult to operate?
a. They work only if members keep to the agreed output and price.
b. They are illegal worldwide.
c. Firms in a cartel are likely to lose money.
d. The products are perfectly competitive.
Answer: a. They work only if members keep to the agreed output and price.
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The difference between savings and investment is that a. investment is purchasing stock, while savings is putting money in a bank. b. investment is purchasing capital, savings is postponing consumption. c. investment is purchasing assets, while consumption is purchasing goods. d. investment increases output, while savings decreases output
Figure 4.1
Suppose studies showed that 12 percent of all teens choose to participate in underage drinking. If policymakers wish to reduce the amount of underage drinking, they should:
A. not share that statistic, and let teens think that it's a huge problem with all teens. B. let teens know that the great majority of teens currently do not drink. C. Informing them will have no impact on their individual behavior. D. The statistic is likely to influence their personal decision, but it is impossible to predict in what way without more information.
American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Which country has a comparative advantage in producing cars? In producing grain?
a. U.S in cars; Japan in grain b. Japan in cars; U.S in grain c. U.S in cars; U.S in grain d. Neither in cars; U.S in grain
Related to the Economics in Practice on page 667: When a country lifts a quota, imports to that country generally ________ and the price of the affected product in that country generally ________.
A. increase; rises B. decrease; rises C. decrease; falls D. increase; falls