Network effects are:
A. reductions in per-unit production cost as firms learn by doing.
B. the change in real GDP resulting from a change in investment or government spending.
C. increases in demand resulting from products being mentioned positively in a television program.
D. increases in the value of a product to each user, including existing users, as the total number of users rises.
Answer: D
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The medium of exchange is defined as
A) an object that is accepted in return for goods and services. B) the exchange of goods and services directly for goods and services. C) an item that can be stored and hold its value over time. D) credit cards. E) barter.
A production possibilities curve is plotted for a nation producing cotton and jute. Which of the following will cause a parallel rightward shift of the production possibilities curve?
A) An invention of a new fertilizer that increases cotton production by ten percent, without any effect on jute production B) An invention of a new fertilizer that increases jute production by five percent, without any effect on cotton production C) An invention of a new fertilizer that increases production of both cotton and jute by ten percent D) A two-times increase in the price of all cotton products and a three-times increase in the price of all jute products
If the real wage rate is such that the quantity of labor supplied is greater than the quantity of labor demanded
A) the economy is at full employment. B) actual real GDP will not equal potential GDP. C) job search decreases. D) labor resources are allocated efficiently.
Which of the following is not a source of comparative advantage?
A) technology B) climate and natural resources C) a strong foreign currency exchange rate D) relative abundance of labor and capital