Explain how network effects have helped Google gain a monopoly over internet searches
What will be an ideal response?
Google created one of the first search engines, creating a dependency on these engines to find something on the internet. Since Google was an early innovator people began recognizing the name and went to their website to search. Advertisers want to place their funds on the most popular search engine, so ads reach more people. This allowed Google gain more users and advertisers, quickly making them the most popular search engine in the United States.
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If the demand for a product increases, then we would expect equilibrium price
a. to increase and equilibrium quantity to decrease. b. to decrease and equilibrium quantity to increase. c. and equilibrium quantity both to increase. d. and equilibrium quantity both to decrease.
Which of the following is incorrect?
A. As the U.S. price level rises, U.S. goods become relatively more expensive so that U.S. exports fall and U.S. imports rise. B. As the price level falls, the demand for money declines, the interest rate declines, and interest-rate-sensitive spending increases. C. When the price level increases, real balances increase and businesses and households find themselves wealthier and therefore increase their spending. D. Given aggregate demand, an increase in aggregate supply increases real output and, assuming downward-flexible prices, reduces the price level.