8) _______ A) Explicit Collusion Is Illegal; If The Managers Of Apex And Bongo

8) _______ A) explicit collusion is illegal; if the managers of Apex and Bongo engage in implicit collusion they may be within the law. B) Implicit collusion is less costly to both firms than explicit collusion; therefore, profits will be greater for both firms if they engage in implicit collusion. C) Implicit collusion always has an enforcement mechanism that forces both firms to collude; explicit collusion does not have an enforcement mechanism. D) Implicit collusion allows Apex to increase its profits at the expense of Bongo without Bongo knowing that collusion has occurred; if Apex engages in explicit collusion, Bongo will realize collusion has taken place and retaliate against Apex. Figure 14-1 Assume that Lexus (L) is the first automobile company to produce a luxury class hybrid automobile and is the only such company for the past four years. BMW is now considering producing its own luxury hybrid automobile and Lexus must decide whether or not to lower the price of its luxury hybrid to counter BMW’s entry into the luxury hybrid niche. 9) Refer to Figure 14-1. Should Lexus lower its price in order to deter BMW’s entry into the luxury hybrid automobile market? 9) _______ A) In terms of profit earned, it makes no difference whether Lexus lowers its price or not; in either case it will make $280 million profit if BMW enters. B) No, because BMW will enter the market regardless of Lexus’ decision about its price. C) Yes, it will drive BMW out of the market. D) No, it should keep the same price and work to capitalize on its brand loyalty. Table 14-4 Alpha and Beta are the only firms selling gyros in the upscale town of Delphi. Each firm must decide on whether to offer a discount to students to compete for customers. If one firm offers a discount but the other does not, then the firm that offers the discount will increase its profit. Table 14-4 shows the payoff matrix for this game. 10) Refer to Table 14-4. How are the firms in this game caught in a prisoner’s dilemma? 10) ______ A) Since each firm is uncertain about the other’s behavior, each will adopt a wait-and-see attitude which results in no increase in market share and no new customers. B) Only the first mover is caught in a prisoner’s dilemma because the second has a chance to observe and respond. C) They are not in a prisoner’s dilemma because there is one clear strategy for each. D) They would be more profitable if they refrained from offering a student discount, but each fears that if it does not offer a student discount it will lose customers. 11) Which of the following is most likely to exert the bargaining power of a buyer? 11) ______ A) Ground beef producers seek to purchase cattle from ranchers. B) Wal-Mart, the world’s largest discount store, seeks vendors to supply products made exclusively for its stores. C) Barnes and Noble purchases books from publishers for sale in its online stores. D) Cowgirl Creamery, a small cheese producer, seeks a dairy farm for its organic milk supplies. TRUE/FALSE. Write ‘T’ if the statement is true and ‘F’ if the statement is false . 12) In an oligopoly, minimum efficient scale is likely to occur at a level of output that is a large fraction of industry sales. 12) ____ 13) The equilibrium in the prisoner’s dilemma is a Nash equilibrium. 13) ______

The Socially Optimal Provision Of A Pure Public Good Can Be Obtained By …

The socially optimal provision of a pure public good can be obtained by … Select one or more: a. Horizontally adding the demand curves for the good b. Privatising the good c. Allowing open access to the good d. Eliminating access to the good e. Vertically adding the demand curves for the good

Which Of The Following Could Be Classified As Pure Public Goods? Select One Or

Which of the following could be classified as pure public goods? Select one or more: a. Free-to-air television b. None of the other answers c. The atmosphere d. The accumulated stock of human knowledge e. National defence

The Optimal Level Of Pollution Occurs Where: Select One Or More: A. The Level

The optimal level of pollution occurs where: Select one or more: a. the level of pollution is zero b. the marginal social benefits from further pollution abatement are zero c. the marginal costs of damage are equal to the marginal costs of control d. pollution abatement most greatly exceeds the pollution level e. the total external costs of pollution are zero

If One Person’s Enjoyment Of The Benefits Of A Good Does Not Interfere With

If one person’s enjoyment of the benefits of a good does not interfere with another’s consumption of it, the good is said to be: Select one or more: a. limitless in utility b. congestible in consumption c. non-rival in consumption d. non-excludable e. excludable

Which One Of The Following Statements Is False Regarding A Transferable Pollution Permit System?

Which one of the following statements is false regarding a transferable pollution permit system? Select one or more: a. Total pollution levels in a region can be set b. The equimarginal principle applies to all firms c. The price of a permit will vary with changes in technology d. Social benefits can be maximized e. The system is preferable to a pollution tax in all situations

Without Government Intervention, Consumption Activities That Generate Positive Externalities Tend To: Select One Or

Without government intervention, consumption activities that generate positive externalities tend to: Select one or more: a. Be associated with behaviour that most voters consider immoral b. Be highly taxed to overcome pollution side effects c. Be assigned to the distribution branch of government d. Proceed until marginal social benefits equal marginal social costs e. Result in less than socially optimal consumption rates

Market-based Regulations Tend To Work Best With Pollutants That … Select One Or More:

Market-based regulations tend to work best with pollutants that … Select one or more: a. Have non-linear and local effects b. Are uniformly mixed and are regional or global in effect c. Have threshold effects d. Are non-uniformly mixed and local in effect e. Cause non-point source pollution

The Coase Theorem States That … Select One Or More: A. An Efficient Allocation

The Coase theorem states that … Select one or more: a. An efficient allocation will also be equitable to all parties concerned b. Property rights should initially be assigned to those affected by a negative externality c. As long as property rights are well defined and transactions costs are high, an efficient allocation will result d. As long as property rights are well defined and transactions costs are minimal, an efficient allocation will result e. Property rights should initially be assigned to those creating a negative externality

How Do The Marginal Costs Of Pollution Control And The Marginal Costs Of Pollution

How do the marginal costs of pollution control and the marginal costs of pollution damage change as pollution levels decrease? Select one or more: a. The marginal costs of control decrease and the marginal costs of pollution damage increase b. The marginal costs of control remain constant and the marginal costs of pollution damage increase c. The marginal costs of control increase and the marginal costs of pollution damage increase d. The marginal costs of control increase and the marginal costs of pollution damage decrease e. The marginal costs of control decrease and the marginal costs of pollution damage decrease

Annual Car Emissions Testing Is An Example Of Which Type Of Pollution Policy? Select

Annual car emissions testing is an example of which type of pollution policy? Select one or more: a. Tradeable permits b. Pollution subsidies c. Standards d. Setting property rights e. Pollution taxes

The Main Disadvantage Of An Emissions Tax Is That … Select One Or More:

The main disadvantage of an emissions tax is that … Select one or more: a. Firms cannot behave in an economically-efficient manner b. The total pollution reduction from an emissions tax cannot be known for sure c. Firms do not have an incentive to reduce pollution d. Differences among firms are not incorporated into the policy e. Firms lack the flexibility to pursue different technologies

Once A Polluting Firm Attains A Regulatory Standard, There Is… Select One Or More:

Once a polluting firm attains a regulatory standard, there is… Select one or more: a. underproduction and too low a price to buyers b. profit to be made by enhancing environmental quality even further c. efficiency in the market equilibrium d. little incentive for the firm to adopt an even cleaner technology e. overproduction and too high a price to buyers

Regulatory Standards That Limit Pollution Typically: Select One Or More: A. Lack Incentives To

Regulatory standards that limit pollution typically: Select one or more: a. lack incentives to reduce pollution once the standard is met b. are applied when pollutants are extremely dangerous and dispersed c. none of the other answers d. are costly to administer e. work effectively when the regulated firms are very similar in size and the types of production processes they use

William Nordhaus And Nicholas Stern Have Very Different Proposals For How To Tackle Climate

William Nordhaus and Nicholas Stern have very different proposals for how to tackle climate change. 1. What is Nordhaus’ “welfare optimizing” price per ton of CO2 in 2020? 2. Roughly how much higher will this raise the price of a gallon of gasoline? 3. Who ultimately pays these higher prices? 4. How much would this lower the usage of fossil fuels? 5. How much hotter is the planet in 2100 under Nordhaus’ welfare optimizing scenario? 6. How much different is this scenario from the “road to hell” scenario where there is no price put on carbon? 7. What differing modeling assumptions result in the big differences between the Nordhaus and Stern models? (see Goodstein chapter 1).

Do You Believe That NAFTA, The North American Free Trade Agreement, Has Hurt Or

do you believe that NAFTA, the North American Free Trade Agreement, has hurt or helped the US?

Illustrate The Situation With A Graph Showing Short-run Aggregate Supply. A Decrease In The

Illustrate the situation with a graph showing short-run aggregate supply. A decrease in the size of the labor force.

How Do I Know Whether To Graph A Short Run Aggregate Curve As Straight

How do I know whether to graph a short run aggregate curve as straight or sloped? Same for AD curves and AS curves, when are they graphed curved and when are the lines straight?

7. Which Of The Following Shifts The Short-run Aggregate Supply Curve Right? Both An

7. Which of the following shifts the short-run aggregate supply curve right? both an increase in the price level that is greater than expected and an increase in the expected price level. an increase in the price level that is greater than expected, but not an increase in the expected price level. an increase in the expected price level, but not an increase in the price level that is greater than expected. neither an increase in the price level that is greater than expected nor an increase in the expected price level. why 4 is correct ?

The Central Bank Increases The Money Supply. Draw This On A Diagram. Is The

The Central Bank increases the money supply. Draw this on a diagram. Is the country in internal balance? In external balance? Explain why independent monetary policy is impossible with capital mobility and a fixed exchange rate?

Canadian-based Mining Company El Dorado Gold​ (EGO) Suspended Its Dividend In March 2016 As

Canadian-based mining company El Dorado Gold​ (EGO) suspended its dividend in March 2016 as a result of declining gold prices and delays in obtaining permits for its mines in Greece. Suppose you expect EGO to resume paying annual dividends in two years​ time, with a dividend of ​$0.35 per​ share, growing by 2.6 % per year. If​ EGO’s equity cost of capital is 9.6 %​, what is the value of a share of EGO​ today?

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