Why might network externalities result in products that contain inferior technologies?
What will be an ideal response?
Network externalities can create significant switching costs related to changing products. When a product becomes established, consumers may find it too costly to switch to a new product that contains a better technology.
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Which of the following goods is least likely to be rivalrous in consumption?
A. a car B. a pair of shoes C. a book D. a computer E. a sunset
A price floor keeps a price:
a. from rising above a certain level. b. from decreasing below a certain level. c. at a stabilized point. d. from increasing or decreasing.
If $1.00 U.S. was equivalent to $1.40 Canadian in 2006 and $1.00 Canadian in 2010, it implies that the:
a. U.S. dollar appreciated against the Canadian dollar in 2010. b. Canadian dollar weakened against the U.S. dollar in 2010. c. U.S. dollar strengthened against the Canadian dollar in 2010. d. Canadian dollar appreciated against the U.S. dollar in 2010.
Marta lends money at a fixed interest rate and then inflation turns out to be higher than she had expected it to be. The real interest rate she earns is
a. higher than she had expected, and the real value of the loan is higher than she had expected. b. higher than she had expected, and the real value of the loan is lower than she had expected. c. lower than she had expected, and the real value of the loan is higher than she had expected. d. lower then she had expected, and the real value of the loan is lower than she had expected.