Economies of scale tend to create natural monopolies.
Answer the following statement true (T) or false (F)
True
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Relative to free trade, domestic producers of a good are ________ off with a tariff because of the ________
A) better; higher price and greater quantity sold B) better; higher price and smaller quantity sold C) better; lower price and greater quantity sold D) worse; lower price and smaller quantity sold E) worse; higher price and greater quantity sold
When consumers decide that they do not want virtual pets anymore, and this drives all the virtual pet producers out of business, this is a reflection of
a. an outrage b. not related to issues of freedom c. consumer sovereignty d. an inefficient use of resources e. a circular flow model
We study the simple model of competitive markets because it helps to:
A. show how poorly the economy actually functions. B. provide useful insights to markets that are not perfectly competitive. C. indicate whether buyers or sellers matter more. D. show how the government controls the economy.
Rapid increases in the price level during periods of recession or high unemployment are known as
A. stagnation. B. inflation. C. stagflation. D. depression.