Opportunistic behavior by oligopolies means
A) that firms cooperate in both the long run and in the short run to prevent others from entering the industry.
B) that firms cooperate in the short run for current gains.
C) that firms refuse to cooperate in the short run.
D) that firms refuse to honor their product guarantees.
B
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If government increases spending and wants to maintain a balanced budget, it should
A) increase taxes by an amount equal to the increase in spending multiplied by the tax multiplier. B) decrease taxes by an equal amount. C) increase taxes by an equal amount. D) decrease taxes by an amount equal to the increase in spending multiplied by the tax multiplier.
The Value of Bonuses Oscar's Outdoor Signage employs salesmen to find new advertisers for existing signs. In an average month, salaried sales staff can keep 80 of 100 signs under contract in a given month. When Oscar experimented with a bonus of $100
for each sign under contract this was increased to 90 of 100 signs. How large must the contribution margin on a sign be to make it profitable to offer the bonuses?