1)Other things equa, when the price of a good rises, the:

a. quantity demanded of the good increases,

b. supply increases,

c. quantity supplied of the good increases,

d. demand curve shifts to the left.

2)Privatization:

a) Has spurred a tremendous increase in cross-border investment.

b) Has allowed governments to have the funds to nationalize important industries.

c) Has guaranteed that new ownership will be limited to the local citizens.

d) Has generally decreased the efficiency of the enterprise.

3)All of the following are conditions which are favorable to the formation of cartels except

A. the existence of a small number of firms.

B. geographic proximity of firms.

C. homogeneity of the product.

D. easy entry into the industry.

4)Prices under an ideal cartel situation will be equal to

A. monopoly prices.

B. competitive prices.

C. prices under monopolistic competition.

D. marginal cost.

1)The correct answer to the given question is option c. quantity supplied of the good increases.

As per the law of demand, ceteris paribus, the quantity demanded for a good or service is inversely related to its price. Thus, an increase in the price of a good leads to a reduction in its demand and a decrease in the price leads to an increase in its demand.

As per the law of supply. ceteris paribus, the quantity supplied for a good or service is directly related to its price. Thus, an increase in the price of a good leads to an increase in its quantity supplied and a decrease in the price leads to a reduction in the quantity supplied.

2)Correct answer: Option a) Has spurred a tremendous increase in cross-border investment.

Explanation:

Privatization is a process in which a country divests itself of the operations and ownership of a business venture. In order to do the same, the country turns itself over the free market system to get privatized. As per the estimates made by some economists, as a result of privatization, efficiency will improve, and operating costs would be reduced by at least 20%. Because of it, there is an unbelievable increase in cross-border investment.

3)The correct answer is Option D . easy entry into the industry. It is not easy to enter in to a market where cartel exist. Under cartel, the existence of a small number of firms into a given market (in which majority creates union), the demography and geographic proximity, as well as the presence of homogenous products makes it hard to enter in an industry where cartel exist. Of all the times, cartel can be equated to a monopolistic market.

4)The correct answer is Option A. monopoly prices.

Take note that under cartel, sellers/producers are organized and agreed to have a fix price system as well as a fixed production and marketing of goods and services. With this, a monopolistic market is somehow created along the process. So, the correct answer is Option A.