Collusive action among producers creates higher prices for consumers because it:
A. causes overproduction and inefficiency.
B. creates negative externalities.
C. forces producers to be more competitive.
D. allows producers to artificially restrict their supply.
Answer: D
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Countries such as the United States that have large populations tend to have
A) higher trade-to-GDP ratios. B) lower trade-to-GDP ratios. C) relatively greater capital outflows. D) relatively smaller capital outflows. E) None of the above.
If the credit market is close to being a competitive market, an interest rate ceiling imposed by usury laws will bring misallocations of resources.
Answer the following statement true (T) or false (F)
The strategy of establishing a price that prevents the entry of new firms is called:
A. price leadership. B. a price war. C. setting a profit-maximizing price. D. limit pricing.
In 2006, before the start of the recession, the employment-population ratio was 63.4 percent. In April 2017, more than six years after the end of the recession, the ratio
A) was still 50 percent lower than the ratio in 2006. B) was still only 60.2 percent. C) was back to its 2006 level. D) had increased to 72.3 percent.