Other things being equal, a higher price induces
A) buyers to reduce the amount they want to buy and sellers to increase the amount they are willing to sell.
B) buyers to increase the amount they want to buy and sellers to reduce the amount they are willing to sell.
C) buyers to reduce the amount they want to buy and sellers to reduce the amount they are willing to sell.
D) buyers to increase the amount they want to buy and sellers to increase the amount they are willing to sell.
A
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Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q380g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />To Mexico, the payoff to cheating is either:
A. $80 million or $110 million.
B. $150 million or $200 million.
C. $100 million or $110 million.
D. $60 million or $100 million.
Suppose we observe that the price of gasoline has been rising, even though the quantity of gasoline sold has been falling. We can conclude that
a. the law of supply does not hold for gasoline. b. the law of demand does not hold for gasoline. c. the demand for gasoline must have fallen. d. the supply of gasoline must have fallen.
"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount.". This statement
a. is an assertion that production functions have the property of constant returns to scale. b. is consistent with the view that capital is subject to diminishing returns. c. is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor. d. All of the above are correct.
If inflows to the capital stock are greater than outflows, then:
A. Net investment is positive B. Net investment is negative C. Depreciation equals gross investment D. Depreciation is greater than gross investment