For years, your neighbor insisted she had no desire to own a computer. Recently, however, she purchased one and says she did so because all her relatives have computers and she wants to exchange e-mail with them. Your neighbor's behavior is an example of
A. the impact of negative market feedback.
B. limited-pricing behavior.
C. a switching cost.
D. a network effect.
Answer: D
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The price elasticity of demand will be larger in absolute value if
a. expenditure on the good represents a smaller proportion of the consumer's total expenditure b. we define the good more broadly c. we define the good more narrowly d. the number of substitutes is smaller e. the number of consumers is larger
A theory is an untested assertion of alleged fact.
Answer the following statement true (T) or false (F)
If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53, then ____________ is _______________
A) producers' surplus; $103 B) consumers' surplus; $103 C) consumers' surplus; $3 D) producers' surplus; $3 E) consumers' surplus; $40
What will a home monopolist prefer?
a. high quotas b. low quotas c. low tariffs d. It would like all of these equally; that is, they are equivalent.