When there are large network effects of adopting a new technology, firms often feel that government regulation or joint ventures can solve the
A. problem of excess capacity.
B. market inefficiency problem.
C. coordination problem.
D. problem of excessive investment.
Answer: C
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Some people think it's unfair that celebrities like Kim Kardashian earn a lot more than people who add so much more value to society, like teachers. What do you think explains this wage differential?
What will be an ideal response?
Suppose that the capital stock initially is 1000, the depreciation rate is 0.08, and investment is 220. This makes the net growth of the capital stock
A) 300. B) 237.6. C) 202.4. D) 140.
Suppose Paul borrows $4,000 for one year from his grandfather who charges Paul 7% interest. At the end of the year Paul will have to repay his grandfather:
A. $4,280 B. $4,820 C. $4,290 D. $4,350
Neoclassical economics tend to make inaccurate predictions of human behavior in situations involving:
A. Price changes B. Financial incentives C. Firms' profits D. Uncertainty and fairness