Which of the Following Statements Regarding Cartels Is FALSE

question 38

Multiple Choice

Which of the following statements regarding cartels is FALSE?

• A) Cheating by cartel members is less profitable and easier to detect if there are fewer firms in the industry.
• B) New entrants can be prevented when the cartel-controlled good is limited in supply.
• C) Cartels should control natural resources that are rare and more valuable.
• D) Cartels are more successful if they are backed by government and the power of the law.

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Definitions:

Type I Error

The mistaken disapproval of a valid null hypothesis, commonly referred to as a "false positive."

Type II Error

The error that occurs when a false null hypothesis is not rejected, meaning a real effect or difference was missed.

Type I Error

The mistake of rejecting a true null hypothesis, or in other words, concluding that a difference or effect exists when it actually does not.

Decision Rule

A pre-determined guideline or criterion used to choose between multiple alternatives in the face of uncertainty, often based on statistical analysis.