To enter a local cable television market, a firm needs a license from the city government. This is an example of
A) a natural monopoly.
B) the government maintaining consistent standards in the broadcast industry.
C) a government-imposed barrier.
D) occupational licensing.
Answer: C) a government-imposed barrier.
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Financial intermediaries reduce the costs of negotiation by
A) investing in a large number of projects with independent returns. B) gaining expertise in evaluating and monitoring investments. C) investing in a small number of projects with independent returns. D) pooling funds.
In the steady state in the Solow growth model, the economy is in equilibrium with the capital-labor ratio and real GDP per worker ________, and with capital, labor, and real GDP ________
A) constant; constant B) growing; constant C) constant; growing D) growing; growing
Why does a typical monopolistically competitive firm face a downward-sloping demand curve?
Because individuals weigh costs and benefits, their economic decisions are _______________.
a. random b. insatiable c. rational d. greedy