A firm could gain from cheating on a cartel agreement by doing all of the following except: A) raising its price above the agreed level. B) lowering its price below the agreed level. C) selling more than its agreed quota. D) increasing production. ANSWER A
Date: September 10th, 2020
Generally speaking, the inclusion of transportation costs in the total costs of production has the effect of causing the LRAC curve to: A) shift down. B) flatten out. C) shift up. D) become steeper over the range on economies of scale. ANSWER C
Date: September 10th, 2020
Which of the following statements regarding cartels is not correct? A) Cartels are sometimes difficult to maintain because a member can cheat by raising its price above the agreed price. B) Cartels restrict industry output in order to raise price. C) Cartels are inherently stable, because oligopolistic firms rarely change price. D) are easier to […]
Date: September 10th, 2020
Gross Domestic Product (GDP) is defined as the market value of all goods and services purchased in the economy during a particular year. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
According to the circular flow model, all else constant, an increase in government spending should cause an increase in spending, income, and production in the economy. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Diseconomies of scale are illustrated by: A) a downward sloping long-run average cost curve. B) a flat long-run average cost curve. C) an upward-sloping long-run average cost curve. D) an upward-sloping short-run average total cost curve. ANSWER C
Date: September 10th, 2020
The sum of personal consumption expenditure, investment expenditure, government expenditure, and net export expenditure on the total amount of real output in the economy in a given period of time is called: A) potential GDP. B) aggregate expenditure. C) real money balances. D) none of the above. ANSWER B
Date: September 10th, 2020
Long-run macroeconomic policies concentrate on: A) minimizing fluctuations around potential GDP. B) maximizing fluctuations around potential GDP. C) incentives for increasing productivity and the potential output of the economy. D) none of the above. ANSWER C
Date: September 10th, 2020
Assume a group of firms has formed a cartel and the cartel is in engaged in joint profit maximization. As such, each firm, acting in its own interests, has an incentive to expand production up to the point at which: A) its marginal cost equals the marginal revenue earned by the cartel. B) its marginal […]
Date: September 10th, 2020
To develop a competitive advantage and increase their firm’s profitability, managers need to understand what affects their revenues, costs, and their ability to set prices. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
