Which of the following is true of a network externality?
a. It is the effect that consumers have on other consumers of the same or a compatible product.
b. It occurs because producers do not internalize the externality
c. It is a negative spillover effect from a private market transaction.
d. It occurs because consumers do not internalize the externality.
a
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
You have the following data about the exchange rates between the Brazilian Real and the Guatemalan Quetzal. June 1, 2011 0.6752 Reales / Quetzales June 1, 2012 0.3481 Reales / Quetzales From this data you may conclude that
A) the Real depreciated. B) the Quetzal appreciated. C) the Quetzal depreciated. D) the Real was revalued.
Nancy owns and operates a drug store that generates total revenues worth $30 million in a particular year. Her accounting costs for the year are $25 million. She could have earned $3 million in this year, if she had worked as a consultant for a pharmaceutical firm. Further, she could have earned 5 percent interest on $40 million of her own money that she invests in the business this year. Nancy's
accounting profit in this year is _____ and her economic profit is _____. a. $5 million; zero b. $5 million; $3 million c. $5 million; $8 million d. zero; $3 million e. $3 million; $43 million
Malthus's gloomy economic outlook for humankind is based on the following principle: a. Population, when unchecked, increases at a faster pace than the production of output
b. Population grows at a slower pace than the production of output. c. Resources grow faster than humankind can reproduce itself. Therefore, humankind can never take full advantage of available resources. d. Resources and population grow at constant percentage rates, but political divisions prevent an equitable division of world output.