Which of the following is an expected result of a network externality?
a. An increase in deadweight loss
b. An increase in social costs
c. A positive spillover effect
d. An increase in private costs
c
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Wendy spends $30 a week on movies and magazines. The price of a movie is $8, the price of a magazine is $2, and Wendy sees 3 movies a week and buys 3 magazines
The price of a magazine now increases to $4 and Wendy's brother gives her $6 a week so that she can still see 3 movies a week and buy 3 magazines. In this situation, Wendy will see ________ movies and buy ________ magazines. A) 3; 3 B) less than 3; less than 3 C) more than 3; fewer than 3 D) less than 3; more than 3
An external benefit is created when you pursue a college education
Indicate whether the statement is true or false
Max Shreck, an accountant, quit his $80,000-a-year job and bought an existing tattoo parlor from its previous owner, Sylvia Sidney. The lease has five years remaining and requires a monthly payment of $4,000
Max's explicit cost amounts to $3,000 per month more than his revenue. Should Max continue operating his business? A) If Max's marginal revenue is greater than or equal to his marginal cost, then he should stay in business. B) Max should continue to run the tattoo parlor until his lease runs out. C) Max's explicit cost exceeds his total revenue. He should shut down his tattoo parlor. D) This cannot be determined without information on his revenue.
Behavioral economics
a. helps explain why economic decision makers maximize either utility or profit b. assumes that people behave "as if" they are maximizing something. c. is a subfield of economics, but one that is rejected by most economists d. explains why irrational behavior is better than typically "rational" behavior. e. points out that some human behavior is not consistent with any type of maximization