When firms in an industry are selling similar products, and they agree to share the market,
A) each firm earns a profit even though marginal cost is greater than marginal revenue.
B) each firm secures a net revenue about as large as it would have received if it were the only seller.
C) they try to keep each firm's price above its marginal cost.
D) they tend to produce higher prices and larger output.
E) the agreement will enforce itself because none of the firms will have an interest in triggering a competitive struggle.
C
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Published in 1776, ________ was written by Adam Smith
A) "An Inquiry into the Nature and Causes of the Wealth of Nations" B) "The Declaration of Economics" C) "The General Theory of Employment, Interest, and Money" D) "The Communist Manifesto"
The logic of the double-dividend hypothesis may not hold because the Pigouvian tax exacerbates pre-existing distortions in the labor market.
A. True B. False C. Uncertain
An outward shift in the demand curve for land will
a. make previously zero-rent land profitable. b. induce people to begin to use land more extensively. c. force reductions in rents. d. be accompanied by a shift in the supply of land.
Which of the following would be a deadweight loss from a tariff?
A) The shift of consumer surplus to government B) The increase in producer surplus C) The decrease in consumer surplus D) The decrease in consumer surplus due to a drop in consumption