Tacit Collusion

question 30

Multiple Choice

Tacit collusion

• A) involves direct communication among competing firms.
• B) is most likely to be successful if there are many competitors.
• C) is seen with conscious parallelism as practiced by GE and Westinghouse in the pricing of turbine engines.
• D) is not illegal.
• E) is most effective when the industry does not have a firm that acts as a price leader.

Grasp the relationship between bondholders and the issuing corporation, including the hierarchy of claims.

Understand the methods for amortizing bond discounts and premiums, including the straight-line and effective interest rate methods.

Recognize the different types of bonds (convertible, callable) and their specific features.

Understand how amortization of bond premium or discount affects interest expense.

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Definitions:

Internal Locus

A belief that one controls their own destiny and outcomes are the result of personal efforts.

Looking-Glass Self

The self you assume others see when they look at you.

Outgoing Personality

A trait characterized by being open, talkative, sociable, and comfortable in interacting with others.

Daniel Yankelovich

A prominent American social scientist known for his work in public opinion research and public policy.