All of the following are conditions which are favorable to the formation of cartels except
A) the existence of a small number of firms.
B) geographic proximity of firms.
C) homogeneity of the product.
D) easy entry into the industry.
D
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A company producing sports equipment wishes to increase its total revenue. Should it increase or decrease its price when the product's price elasticity of demand is equal to -0.8?
(a) Increase - the good is price inelastic and in order to increase TR the firm should increase its price. (b) Decrease - the good is price elastic and in order to increase TR the firm should decrease its price. (c) Increase - the good is price elastic and in order to increase TR the firm should increase its price. (d) Decrease - the good is price inelastic and in order to increase TR the firm should decrease its price.
The increase in the price of sugar created by the tariff will lead domestic production to increase by ________ tons per year, compared to when the economy is open without the tariff.
A. 10 B. 20 C. 40 D. 30
When households hold money for unplanned expenditures and emergencies, it is called
A. the precautionary demand for money. B. the transactions demand for money. C. the irrational demand for money. D. the speculative demand for money.
Which of the following is a TRUE statement?
A. Opportunity costs turn external costs into social costs. B. Opportunity costs always exist with whoever has property rights. C. Voluntary agreements can always yield a situation in which all externalities are internalized. D. Any property right system will yield a situation in which all externalities are internalized.