The purpose of a cartel is to:
a. promote product innovation.
b. increase market competition.
c. act like a monopoly.
d. diversify operations.
e. decrease market concentration.
QUESTION 2In the short run, if average variable cost equals 50, average total cost equals 75, and output equals 100, the total fixed cost must be:
a. 25.
b. 2,500.
c. 5,000.
d. 7,500.
QUESTION 3Which of these is assumed to be constant along an aggregate supply curve?
a. The price level in an economy
b. The exchange rate between the domestic and a foreign currency
c. The state of technology used in production
d. The unemployment rate
e. The real GDP
QUESTION 4A cartel is:
a. a joint venture of two companies.
b. a joining of firms for the purpose of fixing prices and controlling output.
c. a breaking up of a company into two or more parts.
d. the joining of industry with government to solve a specified problem.
e. the joining of two firms with unrelated products.
QUESTION 5Which of the following is most likely to be a fixed cost for a business?
a. expenditures on low-skill labor.
b. shipping charges for the delivery of products.
c. managerial salaries.
d. property taxes on the firm's buildings.
QUESTION 6Macroeconomic equilibrium is best described as a situation in which:
a. the slope of the aggregate demand curve equals the slope of the aggregate supply curve.
b. quantity demanded exceeds quantity supplied.
c. quantity demanded equals quantity supplied at a unique price level.
d. quantity supplied exceeds quantity demanded at a unique price level.
e. quantity supplied equals quantity demanded at a unique price level.
QUESTION 7Suppose an oil cartel has an agreement to restrict members' production in order to maintain a price of 30 per barrel. A single cartel member may want to cheat and exceed its quota so that it can:
a. reduce its costs.
b. charge higher prices.
c. make demand more inelastic.
d. earn a bigger profit.
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