Monopolies that exist because economies of scale create a barrier to entry are called natural monopolies.
Answer the following statement true (T) or false (F)
True
This is the definition of a natural monopoly.
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The difference between an absolute price and a relative price is that:
a. absolute prices are based on costs of production, relative prices are based on market exchange. b. absolute prices are in terms of currency, relative prices are in terms of another good. c. absolute prices are in terms of another good, relative prices are in terms of currency. d. absolute prices never change, relative prices change with inflation.
The U.S. Postal Service is an example of a(n):
a. oligopoly b. perfectly competitive market c. monopoly d. monopolistically competitive market
Which of the following would not be considered physical capital?
A. A spotlight B. An optical lens C. A trained physicist D. A clipboard
The putting up of outside collateral is
A) one form of the moral hazard problem. B) one form of the adverse selection problem. C) a signal of a high-quality borrower. D) a signal of a low-quality borrower.