The two conflicting tendencies that a firm has in an oligopolistic industry are the incentive to
a. cheat to maximize joint profits and the incentive to raise prices.
b. cheat and avoid collusion and the incentive to raise price to maximize the firm's share of profits.
c. increase output in order to minimize per-unit costs and the incentive to reduce price in order to maximize joint profit.
d. cooperate to maximize joint profits and the incentive to cheat on the agreement in order to increase the firm's share of the profit.
D
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In the classical model, what occurs if a wage of $20/hour results in unemployed workers?
A) The wage rate will drop, more workers will be hired, and the unemployment rate falls. B) Producers will quickly create more jobs and hire the unemployed workers, so unemployment is short-lived. C) The workers will go on strike to demand that more jobs be created. D) The government will step in and order firms to hire more workers.
Provide some examples of industries near your school that operate in monopolistic competition (excluding those given on the text page in the figure)
What will be an ideal response?
New York Times writer Michael Lewis wrote that "The sad truth, for investors, seems to be that most of the benefits....are passed through to consumers free of charge." To which of the following did Lewis refer?
A) the Enron accounting scandal B) apple farming in New York state C) new technologies developed in the 1990s D) the medical screening industry
A nation's producers can compete effectively with imports from other nations if it has
a. high wages b. low wages c. low labor cost per unit of output d. less specialization e. low labor productivity