A natural monopoly is most likely to occur in which of the following industries?
A) the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years
B) the diamond mining and marketing industry because one firm can control a key resource
C) the software industry because of the importance of network externalities
D) an industry where fixed costs are very large relative to variable costs
Answer: D
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The process of combining many different debt instruments like home mortgages into a pool of hundreds of thousands of individual contracts and then selling new financial instruments is called
A) Securitization. B) Leveraging. C) Sub-priming. D) NINJA loaning.
One way the government can introduce competition into a monopoly industry is to:
A. break up the company along different stages of the production process. B. split it vertically. C. split it horizontally. D. All of these statements are true.
Starting from an equilibrium position,
a. the imposition of a price floor below the equilibrium price will increase the quantity demanded. b. the imposition of a price floor below the equilibrium price will decrease the quantity exchanged. c. the imposition of a price floor above the equilibrium price will decrease the quantity demanded. d. the imposition of a price floor above the equilibrium price will increase the quantity exchanged.
Most real-world choices aren't about getting all of one thing or another; instead, most choices involve _________________, which includes comparing the benefits and costs of choosing a little more or a little less of a good.
A. benefit analysis B. utility C. marginal analysis D. opportunity cost