For years, your parents claimed they had no desire to join a social web site. Recently, however, they joined one and said they did so because all their relatives have joined the same site with them. Your parents' behavior is an example of
A) a switching cost.
B) a network effect.
C) the impact of positive market feedback.
D) the impact of negative market feedback.
B
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An economy experiences a recessionary ga
A) falls, shifting the aggregate supply curve rightward. B) rises, shifting the aggregate supply curve leftward. C) rises, shifting the aggregate demand curve rightward. D) falls, shifting the aggregate demand curve leftward. E) falls, increasing potential GDP.
Attempts to fine-tune the economy through shifts in fiscal and monetary policy
A) cannot alter the level of unemployment but may change the price level. B) may not do any good but certainly do no harm. C) produce greater stability, but only at the cost of an ever-increasing national debt. D) will increase rather than reduce instability if the policy makers lack adequate information.
Why do economies of scale and monopoly power exist with network goods?
A. Many small firms must develop to serve all of the consumers willing to pay for access to the network good, so their costs are driven down. B. Network goods require a group of sellers working together and this cooperation reduces the firms' cost per unit. C. Just as the value of a network good decreases to each user as the total number of users increases, so does the long run average cost decrease as output increases. D. As the number of people connected to a network increases, the greater the benefits each person gets and the smaller the cost per unit to supply.
Total output may continue to rise even though marginal physical product is negative.
Answer the following statement true (T) or false (F)