Which of the following will tend to increase the ability of a union to increase the wages of its members?
a. Almost all of the firms in the industry are unionized.
b. Foreign competition for the product produced by the union labor is intense.
c. There is a reduction in the demand for union labor.
d. The demand for the product produced by the union labor is highly elastic.
A
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Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix shows the economic profit that each firm can make
If the game is played repeatedly and Felix and Oscar both use a tit-for-tat strategy, then ________. A) Felix will make $10 million of economic profit and Oscar will cheat B) Felix and Oscar will each make $1 million of economic profit C) Felix will make -$2 million economic of profit and Oscar will cheat D) Felix and Oscar will each make $10 million of economic profit
Is the profit-maximizing price-taking firm able to mark up price above the marginal costs of production at the profit-maximizing level of output? Why or why not?
What will be an ideal response?
In the absence of financial frictions, ________
A) interest rates for different borrowers move closely together B) all loans in the economy are transacted at a common interest rate C) the level of output is not affected by changes in the real interest rate D) an increase in inflation leads to a decrease in the real interest rate
Because a bank has a very large pool of buyers and savers, it can:
A. act as an intermediary between firms and government. B. provide liquidity to some individuals that deposit funds. C. diversify the risk of saving and borrowing for individuals. D. act in the best interest of society by ensuring there is enough money for people.