A network externality is:
A. a direct effect on an economic decision maker.
B. an uncompensated effect on someone other than the person who caused it.
C. an indirect effect on an economic decision maker.
D. the effect that an additional user of a good or participant in an activity has on the value of that good or activity for others.
Answer: D
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A consumer's budget set:
A. is the set of all affordable combinations of two goods. B. includes only combinations of two goods that leave the consumer with leftover money. C. includes only combinations of two goods that exhaust the budget. D. Both is the set of all affordable combinations of two goods and includes only combinations of two goods that exhaust the budget are correct answers.
Monopolistically competitive firms face downward-sloping residual demand curves because these firms
A) have relatively few rivals (compared to competition). B) sell differentiated products. C) A and/or B. D) None of the above.
Which of the following features are relevant for determining the extent of a market?
A) Its geographical boundaries. B) Technological innovations that would reduce the cost of production. C) The range of products to be included in it. D) both A and B E) both A and C
How does an increase in income affect the market for bus rides (inferior good)?
a. The demand curve for bus rides to shift to the right b. The demand curve for bus rides to shift to the left c. The supply curve for bus rides to shift to the right d. The supply curve for bus rides to shift to the left