Under conditions of oligopoly, economies of large-scale production mean that:
a. firms are able to sell all of the output they desire
b. it is difficult for a firm to determine its profit-maximizing price and output.
c. large firms would find it more profitable to break up into smaller production units.
d. small firms are at a disadvantage in competing with relatively large firms.
d
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Don and Susanne have both been accused of insider trading. Don knows that if he confesses while Susanne keeps silent, he will receive a 1-month jail sentence. He also knows that if Susanne confesses and he keeps silent, he will receive a 12-month jail sentence. If neither of them confesses, there will be insufficient evidence to convict either of insider trading, but there is enough evidence to convict each of them individually of obstructing justice, which carries a 2-month sentence. If both of them confess, they will both serve a 3-month jail sentence. This situation is:
A. an application of the prisoner's dilemma. B. not realistic because those accused of insider trading are never encouraged to confess. C. not realistic because those accused of insider trading always keep silent. D. an example of cartel behavior.
The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited.
With an export subsidy of $20 per bushel, the net loss in national well-being as a result of the export subsidy is
A. $500 million. B. $200 million. C. $2.2 billion. D. $300 million.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
If the institutions in an economy change from being inclusive to extractive, then in the economy:
A) the returns to entrepreneurship will increase. B) the opportunity cost of entrepreneurship will decrease. C) the number of entrepreneurs will decrease. D) existing entrepreneurs will earn higher profits.