A cartel is formed among the major firms in an industry that maximizes joint profits of the firms. Each firm:
A. will be protected from the economic effects of a recession.
B. has the incentive to cheat by cutting its price.
C. has a perfectly elastic demand for its product.
D. will operate at the level of output associated with the kink in the demand curve.
Answer: B
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The figure above shows the market for college education in the United States. If the government does not intervene in this market, the deadweight loss equals ________ per year
A) $28 billion B) $14 billion C) $280 billion D) $224 billion E) $7 billion
The labor force equals the sum of the employed and the unemployed
a. True b. False Indicate whether the statement is true or false
Any economic model should be judged primarily on
A. how realistic its assumptions are. B. how easy the model is to use. C. how many aspects of real-world behavior and choices are incorporated in the model. D. how original the model is compared to other models. E. how accurately its predictions match observed behavior.
How much is the firm's output at the break-even point?
