All but one of the following have been suggested by some economists as possible consequences of path dependency and switching costs. Which of the following is not a possible consequence of path dependency and switching costs?
A) diseconomies of scale
B) market failure
C) Consumers may get locked into using products with inferior technology.
D) Government intervention may be necessary in affected markets in order to improve economic efficiency.
A
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______________ stabilizers are programs that are already laws that stimulate aggregate demand in a recession and hold down aggregate demand in a potentially inflationary period.
a. Automatic b. Temporary c. Planned d. Economic
The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in
a. performing an experiment in an economic system. b. applying mathematical methods to economic analysis. c. analyzing available data. d. formulating theories about economic events.
Two farmers, A and B, each apply 100 tons of manure on their fields. To reduce manure runoff, the government has decided to require a permit for each ton of manure applied. The government gives each farmer 50 tradeable permits. Farmer A incurs losses of $25 for each ton of manure he does not apply, and Farmer B incurs losses of $50 for each ton of manure he does not apply. After permit trading,
we would expect that a. farmer A will no longer apply manure, and farmer B will not reduce his manure application at all. b. farmer B will no longer apply manure, and farmer A will not reduce his manure application at all. c. farmer A and B will each apply 50 tons of manure. d. farmer A will apply 25 tons of manure, and farmer B will apply 50 tons of manure.
An important determinant of a nation's standard of living in the long run is its net exports
Indicate whether the statement is true or false