Summarize the three conditions cited in the text under which a cartel is most likely to succeed. Of these three, which do you think is most important? Why? What will be an ideal response? ANSWER A cartel agreement has the greatest chance of success when the cartel can raise the price of its product […]
Date: September 10th, 2020
Which of the following best describes the influence of successful advertising on the market for aspirin? A) The market demand curve shifts to the right, creating a shortage at the original equilibrium price. B) Individuals’ demand curves shift to the right, but the market demand curve remains at its original position. C) The market supply […]
Date: September 10th, 2020
Empirical evidence suggests that economies of scale, advertising and image differentiation, and risk spreading all help account for the large-scale production that exists in many sectors of the economy. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Borrowing from abroad represents: A) a capital outflow. B) a capital inflow. C) positive net savings. D) none of the above. ANSWER B
Date: September 10th, 2020
In a open economy, aggregate expenditures are the sum of personal consumption, investment, government, and net export expenditures. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Summarize the relationship between elasticity, price changes, and changes in total revenue. What will be an ideal response? ANSWER When demand is inelastic, total revenue moves in the same direction as price, and in the opposite direction of quantity demanded. When demand is elastic, total revenue moves in the opposite direction of price, and […]
Date: September 10th, 2020
Assume two firms are currently competing in a market. If one of the two firms wants to try to eliminate the other firm as a competitor, should it undertake a strategy of limit pricing or predatory pricing? Why? In addition, describe the conditions under which the strategy you have selected will be most successful. […]
Date: September 10th, 2020
High interest rates might cause a corporation to ________ building a new plant that would provide more jobs. A) complete B) consider C) postpone D) contemplate ANSWER C
Date: September 10th, 2020
A trade surplus means: A) the country has positive net savings, which it lends abroad. B) the country has negative net savings, which it lends abroad. C) the country has positive net savings, which it borrows from abroad. D) the country has negative net savings, which it borrows from abroad. ANSWER A
Date: September 10th, 2020
It is often observed that the prices charged for gasoline by the various gas stations in a particular city tend to move together very closely. Is this an example of tacit collusion that should be prosecuted in the United States? Why or why not? What will be an ideal response? ANSWER Many people want […]
Date: September 10th, 2020
