As network externalities broaden the use of a product, the:
A. need for a single standard becomes less important, so many different standards are likely to coexist.
B. need for a single standard becomes more important and eventually one standard wins out.
C. incentive to replace that product with something new grows stronger.
D. benefits of that product to everyone are diminished.
Answer: B
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Consider the stock of ocean tuna which is massively overfished. It is rational for an individual to exploit the resource rather than to conserve the stock because
A) the marginal private benefit of harvesting tuna is lower than the marginal social benefit of harvesting it. B) the marginal private cost of harvesting the fish is lower than the marginal social cost. C) the marginal social cost of harvesting the fish is lower than the marginal private cost. D) the marginal private benefit of harvesting tuna is higher than the marginal social benefit of harvesting it.
The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression. B) the presence of both high unemployment and high inflation during the 1970s. C) theoretical proof that Keynes's ideas were invalid. D) evidence that Keynes's ideas were useful during economic recessions, but not during economic booms.
Many economists who accept the real business cycle explanations of economic fluctuations
a. believe that the sharp rise in the relative price of imported oil was the central cause of the deep recession in the United States in the mid-1970s. b. believe that the restrictive Federal Reserve monetary policy was the central cause of the deep recession in the United States in the mid-1970s. c. believe that the sharp rise in the relative price of imported oil was not the main cause of the deep recession in other industrialized nations in the mid-1970s. d. both a and c. d. None of the above
According to classical macroeconomic theory, nominal variables, but not real variables, are affected by changes in the
a) supply schedule. b) labor supply. c) money supply. d) aggregate supply.