Some economists have argued that path dependence and switching costs can lead to market failure. Which of the following is an example of this argument?
A) VHS video recorders became more popular with consumers than Sony Betamax recorders even though the Betamax recorders embodied a superior technology.
B) A consumer who won a lottery for a Super Bowl ticket refuses to sell it for $3,000 even though he would not have paid $3,000 for a ticket if he had not won the lottery.
C) Costly celebrity endorsements lead many consumers to buy a product even though it is more expensive or less effective than a product that is not endorsed by a celebrity.
D) While playing the ultimate game, an allocator decides to share $20 equally with a recipient rather than keep the $20 for herself.
A
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If production involves constant opportunity cost, the production possibilities frontier
A. is “bowed inward.” B. is a straight line. C. is “bowed outward.” D. is a wavy line. E. has an unpredictable shape.
Imports from China represent ____ of total U.S. imports
a. less than 20% b. approximately 40% c. approximately 60% d. more than 80%
The market demand curve for a particular good
A. may or may not show a direct relationship between price and quantity demanded. B. may be less than an individual demand curve for the good. C. is the horizontal sum of all individual demand curves for the good. D. will not be affected by any of the determinants of individual demand.
General sources of shocks that can cause business cycles include the following, except:
A. Irregular occurrence of innovations and productivity changes B. Monetary factors and financial instability C. Unemployment jumps and production drops D. Political events, either domestic or global