The barrier to entry protecting a social site like Facebook is primarily
A. ownership of a scarce factor of production.
B. patents.
C. economies of scale.
D. network effects.
Answer: D
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When the absence of property rights causes a market failure, the government can potentially solve the problem
a. by clearly defining property rights. b. through regulation. c. by supplying the good itself. d. All of the above are correct.
A negative externality arises when a person engages in an activity that has
a. an adverse effect on a bystander who is not compensated by the person who causes the effect. b. an adverse effect on a bystander who is compensated by the person who causes the effect. c. a beneficial effect on a bystander who pays the person who causes the effect. d. a beneficial effect on a bystander who does not pay the person who causes the effect.