Network externalities refer to the situation where the usefulness of a product increases with the number of consumers who use it
Indicate whether the statement is true or false
TRUE
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We say that goods are complements when they:
A. serve similar-enough purposes that a consumer might purchase one in place of the other. B. are consumed together, so that purchasing one will make a consumer more likely to purchase the other. C. can replace something consumers typically purchase at a significantly lower price. D. change a consumer's preferences for a good or service.
Apple Computer is more likely to continue to use input markets rather than manufacture its own inputs internally when
a. the quality of inputs is difficult to determine b. switching among input suppliers is easy c. there are very few firms producing the input d. the input is difficult to identify and define e. transaction costs go up
In general, GDP per capita is not highly correlated with alternative measures of quality of life
a. True b. False Indicate whether the statement is true or false
DASH Airlines is considering the addition of a flight from Red Cloud to David City. The total cost of the flight would be $1,100, of which $800 are fixed costs already incurred. Expected revenues from the flight are $600. DASH should:
A. not add this flight because only flights that cover their full costs are profitable. B. not add this flight because it is not profitable at the margin. C. add this flight because marginal revenue exceeds marginal costs and total revenue exceeds total variable cost. D. not add this flight because total costs exceed total revenue.