Due to the network externalities in the smartphone market, we would expect this market to
A. overproduce game consoles.
B. be serviced by a natural monopoly.
C. be highly concentrated.
D. be efficient.
Answer: C
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Permitting the exchange rate to float
A) automatically reduces the real income effects of volatility in aggregate expenditures. B) will result in dramatic shifts in the balance of payments. C) will induce locomotive effects between most trading partners. D) will result in the complete crowding-out effect of fiscal spending.
When the domestic currency is initially undervalued in a fixed exchange rate regime, the central bank must intervene in the foreign exchange market to ________ the domestic currency, thereby allowing the money supply to ________
A) purchase; decline B) sell; decline C) purchase; increase D) sell; increase
Which of the following is a term for the total value of a firm's outstanding shares?
A) market value B) intrinsic value C) fair value D) fairness value
Which of the following would NOT be a barrier to entry for a particular market?
A) ownership of a patent B) low cost of obtaining initial capital C) the presence of economies of scale D) government regulation