Cartels usually succumb to divisive forces caused by
a. limited information.
b. members cheating by giving secret discounts.
c. entry by new rivals seeking profits.
d. insufficient profits compared to independent operations.
b
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The increase in the demand for widgets, shown in the figure above, is the result of a decrease in the price of McBoover devices from $11 to $9. Therefore, the cross-price elasticity for these two products is
A) -2.0. B) -0.5. C) 0.5. D) 2.0.
The greatest appeal of U.S. Treasury securities is that
A) they have high yields. B) they have no default risk. C) the U.S. Treasury will repurchase them at any time. D) their market prices fluctuate very little.
According to the Gordon-Growth model, what is the value of a stock with a dividend of $2, required return on equity of 8% and expected growth rate of dividends of 4%?
A) $25 B) $26 C) $50 D) $52
Refer to Figure 7.1. At output level Q3
A) average fixed cost reaches its minimum. B) average total cost reaches its minimum. C) average variable cost reaches its minimum. D) marginal cost reaches its minimum. E) all of the above