The network effect in the TV broadcasting industry results in
A. a positive market feedback between the number of advertisers and the number of TV channels.
B. a negative market feedback between the number of advertisers and the size of TV audience.
C. a negative market feedback between the number of advertisers and the number of TV channels.
D. a positive market feedback between the number of advertisers and the size of TV audience.
Answer: D
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In recent years, the prices of new domestically produced cars have been falling. Suppose consumers respond by reducing their demand for used cars and mass transport services such as bus travel
This information suggests that the cross-price elasticity between new cars and used cars, and the cross-price elasticity between new cars and bus travel, are negative. Indicate whether the statement is true or false
Which of the following is not a reason for solving the model with a PPF?
A) It merges the household and firm problems into one graph. B) It is simpler to solve the social planner problem. C) It highlights the fact that the marginal rate of substitution should equal the marginal rate of transformation. D) It highlights the fact that firms make no profit in equilibrium.