An oligopolistic firm that is part of a collusive agreement is less likely to cheat
a. the more punishment it expects if the cheating is detected
b. the lower is the possibility of detection
c. the less likely is the collapse of the entire agreement as a result of cheating
d. the greater is the additional profit from charging a lower price than the other firms
e. the higher is the chance of taking customers away from competitors by charging a lower price
A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
The U.S. patent system
a. makes general knowledge excludable. b. makes specific, technical knowledge excludable. c. creates a disincentive to invent. d. Both a and b are correct.
The Consumer Price Index measures
A. changes in the money supply. B. changes in all prices. C. changes in the price of a market basket of consumer goods. D. changes in the cost of consumer credit.
Answer the following statements true (T) or false (F)
1. When the total product is at its maximum level, the marginal product is zero. 2. hen total product is increasing at a decreasing rate, marginal product is positive, but falling. 3. The short-run marginal-cost curve is upward-sloping because of the law of diminishing marginal returns. 4. Marginal product is highest where marginal cost is lowest. 5. When a firm increases its output, its average fixed costs will stay constant.