The Costly-To-Fake Principle Indicates That

question 26

Multiple Choice

The costly-to-fake principle indicates that

• A) counterfeiting art objects is difficult.
• B) for a seller to have credibility,he must make fake statements.
• C) for a buyer to have credibility,he must offer a price that is difficult to fake.
• D) for information to be seen as credible,it must be costly to fake.
• E) being fake is a costly strategy.

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Definitions:

Net Social Cost

The comprehensive expense to the community for the production of one more unit of an item, encompassing both personal expenses and external factors.

Rent-Seeking Behavior

Actions by individuals or firms to increase their own wealth without generating new wealth or value for society, often through manipulating the social or political environment.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market with no close substitutes, often leading to less competitive markets.

Marginal Cost

The cost of producing one additional unit of a good or service, taking into account factors that vary with production levels.