If a cartel firm is producing a quantity at which the marginal revenue is $2 and the marginal cost is $2, the firm ________.
A) is producing less than the agreed upon quantity
B) has erected a barrier to entry
C) is producing the agreed upon quantity
D) has acted in self-interest
D) has acted in self-interest
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The above figure shows two Lorenz curves. Lorenz curve A shows the distribution of income and Lorenz curve B shows the distribution of wealth. Which statement below is CORRECT?
A) The Lorenz curve for wealth shows that wealth is distributed less equally because wealth does not include human capital. B) The Lorenz curve for income shows that income is distributed less equally because income does not include income from stocks and bonds. C) The Lorenz curves show wealth is greater than income. D) The Lorenz curves show income is greater than wealth.
The substitution effect suggests that, when consumers judge product quality by price, they will substitute high-priced products for low-priced products.
a. true b. false
Crowding out is associated with:
A. a decrease in government spending caused by a shortage of available credit. B. a reduction in business investment resulting from an increase in government borrowing and higher interest rates. C. an increase in business investment resulting from an increase in government borrowing and higher interest rates. D. an increase in private savings caused by higher future tax liabilities when government increases borrowing.
The value of the Swiss franc relative to the dollar would decrease if the demand for dollars increases and the supply of Swiss francs
A. remains unchanged. B. increases. C. decreases. D. all of the above are correct