Why does a network externality arise?
a. Each additional unit of a good sold reduces the value of the previously sold units.
b. As more and more units of a good are produced, the average cost declines.
c. Consumption of a good by one user does not affect the consumption of subsequent users.
d. The firms enjoy economies of scale in the long run.
e. Each additional unit of a good sold increases the value of the previously sold units.
e
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If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 5 tractors is _______ bicycles.
A) 5 B) 20 C) 100 D) 125
The M1 measure of the money supply equals
A) currency plus checking account balances plus traveler's checks plus savings account balances. B) currency plus checking account balances plus traveler's checks. C) currency plus checking account balances. D) paper money plus coins in circulation.