Which of the following reflects the incentive structure confronted by a typical firm in a cartel?
a. If I alone cheat, I'm better off; if everyone cheats, I'm worse off.
b. I can never do better for myself than by following agreed-upon cartel policies.
c. If everyone cheats, I'm better off and so is everyone else in the cartel.
d. If I suspect others are planning to cheat, I'll do best for myself by deciding not to cheat.
A
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Which of the following would be a violation of the rational expectations assumption?
A) "Over the past twenty years, people have consistently under-predicted the inflation rate for the following year." B) "Over the past twenty years, people have never once accurately predicted the inflation rate for the following year." C) "The Fed's announcement that it might ease interest rates caused an immediate drop in short-term rates, even before the Fed took any action." D) all of the above E) none of the above
The three concepts of optimal capacity utilization are:
a. optimal plant size for a given output rate b. optimal cost of manufacturing c. optimal plant size d. optimal output for a given plant size e. all of these except b f. all of these except c