Explain Microsoft Windows' monopoly positions in terms of network externalities
What will be an ideal response?
Microsoft marketed Windows really well and at some point a critical mass of people had it installed on their computers. Since a lot of people already used Windows it was beneficial for new consumers to buy it also, which fortifies Microsoft's position.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
The figure above shows Prakash's and Gail's production possibilities frontiers for writing books and magazine articles
a. What is Prakash's opportunity cost of a book? What is Gail's opportunity cost? Who has the comparative advantage in writing books? b. Who has the comparative advantage in writing magazine articles? c. According to their comparative advantages, who should write books and who should write magazine articles?
At the profit-maximizing level of production of a monopolist, ________
A) marginal revenue equals marginal cost B) marginal revenue exceeds marginal cost C) marginal revenue is less than marginal cost D) both marginal revenue and marginal cost are negative
During 2008 in the United States, consumer confidence fell significantly. Which of the following will occur as a result of this reduction in consumer confidence?
A) The LM curve will shift up. B) The LM curve will shift down. C) The IS curve will shift rightward. D) The IS curve will shift leftward. E) The IS curve will shift rightward, and the LM curve will shift up.