Complementary goods are goods
a. that are consumed jointly
b. that are consumed one in place of the other
c. for which demand increases when the price of its complementary goods increases
d. for which demand decreases when the price of its complementary goods decreases
e. that are inversely related
A
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If the Fed sells a T-bill to an individual rather than to a commercial bank, how will this affect the money supply?
a. It will increase the money supply. b. It will increase the checking account balance of the individual. c. It will have no effect on the money supply. d. It will decrease the money supply.
Answer the following questions true (T) or false (F)
1. A network externality refers to a situation in which the usefulness of a product decreases with the number of consumers who use it. 2. Economists have shown that when the ultimatum game experiment is carried out, both allocators and recipients act as if fairness is important. 3. The iPod is a product without any significant network externalities.