In a Particular Country in 1998,the Average Worker Needed to Work

question 48

Multiple Choice

In a particular country in 1998,the average worker needed to work 40 hours to produce 100 units of output.In that same country in 2008,the average worker needed to work 36 hours to produce 72 units of output.In that country,the productivity of the average worker

• A)decreased between 1998 and 2008,so we would expect the standard of living to have decreased accordingly.
• B)increased between 1998 and 2008,so we would expect the standard of living to have increased accordingly.
• C)decreased between 1998 and 2008,so we would expect inflation to have decreased accordingly.
• D)increased between 1998 and 2008,so we would expect inflation to have increased accordingly.

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Definitions:

Price Leadership

An informal method that firms in an oligopoly may employ to set the price of their product: One firm (the leader) is the first to announce a change in price, and the other firms (the followers) soon announce identical or similar changes.

Oligopoly

An oligopoly is a market structure characterized by a small number of firms dominating the market, where each firm has significant control over prices and other market factors.

Collusion

A non-competitive, secret, and often illegal agreement between rivals aiming to disrupt the market's equilibrium by controlling the market price, production, or marketing of goods and services.

Empty Threat

In a sequential game with two players, a noncredible (bluffing) statement made by Player 1 that threatens a penalizing action against Player 2 if Player 2 does something that Player 1 does not want Player 2 to do. Opposite of credible threat.