Network externalities
a. explain why switching costs fall as the size of a network increases
b. are the service-industry equivalent of natural monopolies in goods-producing industries
c. are more important in the short run than in the long run
d. help explain why monopolies often do not last for very long
e. can explain the dominance of existing firms in some industries
E
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Economic freedom is
A) the right to vote in an election for a political leader. B) the right to own private property and to exchange goods with minimal government interference. C) the amount of control that the government has in a market. D) present as long as private individuals own businesses.
What happens in public schools when government funds subsidize education?
A. The quality of education rises. B. The cost of providing the education is more than what the students pays. C. There is a shortage of schools. D. The cost of providing the education is less than what the student pays.
Fiscal policy is
A) the selling of government bonds by the Treasury. B) the deliberate manipulation of the money supply designed to affect the interest rate. C) the deliberate manipulation of taxation and spending designed to affect the economy. D) the selling of foreign exchange reserves designed to change the exchange rate.
Refer to the diagram, where variable inputs of labor are being added to a constant amount of property resources. Average variable cost will be at a minimum when the firm is hiring:
A. Q 3 workers.
B. Q 2 workers.
C. Q 1 workers.
D. more than Q 3 workers.