1.The levels of profit in a cartel are a. initially high, but then decrease as s
ID: 1166195 • Letter: 1
Question
1.The levels of profit in a cartel are
a. initially high, but then decrease as substitue good emerge.
b. initially low, but then decrease as the level of competition increases.
c. initially low, but then increase as the level of competition increases.
d. near the monopoly level of profits.
e. zero (this answer was wrong on my quiz)
2. What role does corruption play in creating income inequality?
a. it discourages mobility
b. it encourages human capital investments
c. it discourages winner-take-all situations (this was wrong on my quiz)
d. it discourages business investments
e. its discourages discrimination
3. it is important to adjust the poverty threshold every year because of
a. changes in minimum wage.
b. changes in the level of in-kind transfers
c. changes in taxes
d. changes in prices
e. changes in family size
Explanation / Answer
Answer : option D is correct.The level of profit in the cartel is same as the level of profit in Monopoly because cartel means a group of association form together in order to earn maximum profit as monopoly. There main motive is to grab maximum share and charge higher price by selling output where MC=MR.
Answer 2 : option A is correct. Corruption play an important role in the income inequality as a discourages mobility. Corruption lead to discourage social mobility as a result the economy has been become backward and stagnant which resulted in the income inequality in an economy
Answer 3: Option D is correct. It is important to adjust poverty threashold every year because of change in the prices as the cost of living index has been changed. So the poverty line has been changed according to the required scanerio.
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