When a cartel breaks down and its members start cheating, the behavior in the industry becomes a
A) noncooperative game.
B) zero-sum game.
C) high stakes game.
D) positive sum game.
Answer: A
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Which of the following is the best example of a good or service with an external benefit?
A) gasoline B) education C) garbage disposal D) fertilizers E) bread
How does an increase in the relative price of a country's goods in terms of foreign goods, or real exchange rate, affect its balance of trade?
A) An increase in the real exchange rate reduces imports, raises exports, and increases the balance of trade. B) An increase in the real exchange rate raises imports, reduces exports, and reduces the balance of trade. C) An increase in the real exchange rate reduces imports, raises exports, and reduces the balance of trade. D) An increase in the real exchange rate raises imports, reduces exports, and increases the balance of trade.