A natural barrier to entry is defined as a barrier that arises because of
A) technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms.
B) patents or licenses that exclude others from producing a good or service.
C) many firms producing the good and thereby allowing choice for all consumers.
D) anticompetitive practices by a firm that keep other firms from producing.
E) one firm owning a key natural resource.
A
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Which of the following do behavioral economists use to demonstrate how our sense of fairness affects our decision making?
a. the endowment effect b. the gambler’s fallacy c. the law of diminishing marginal utility d. the ultimatum game
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.
The law of demand is based on the observation that
A) people buy less of a product when the product becomes less fashionable. B) people buy more of a product when its price falls. C) people are indifferent to price changes. D) people always want more than they need.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.