If Your Economics Professor Grades on a Curve and All

question 35

Essay

If your economics professor grades on a curve and all students agree to get together (i.e., collude) and not study, overall effort is reduced and the grade distribution remains relatively unchanged. Explain whether this is a realistic outcome. Does your answer differ depending on whether the class is large or small? Relate your answer to the problems of collusion in cartels discussed in the chapter on oligopolies.

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Definitions:

Perpetual Inventory System

An accounting approach that continuously updates inventory records for sales and purchases, providing a real-time view of inventory levels.

Physical Inventory

The process of counting all the physical goods and materials a company has in its possession at a certain point in time, often done annually.

Cost of Goods Purchased

The total cost incurred by a company to acquire goods or raw materials for production, including any additional expenses directly related to the purchase.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, used for calculating cost of goods sold.