O A. the substitution effect of a price change is larger than the income effect, but a network externality is negative if the income effect is larger than the substitution effect. O B. consumption by others decreases a typical consumer's marginal utility from consuming the good, but a network externalit is negative if consumption by others increases a typical consumer's marginal utility from the good. O C. the price is lower the more paople own it, but a network externality is negative if the price is lower the fower people own it. O D. the quantity demanded is higher the more people own it, but a network externality is negative if the quantity demanded is lower the more people own it. E. it has a complement, but a network effect is negative if it has a substitute. ve an example of each. n example of a positive network externality is the demand for A. a work of art for exclusivity, and an example of a negative network externality is the demand for a work of art for status. O B. a toy to indulge a fad, and an example of a negative network externality is the demand for computers whose intrinsic value

O A. the substitution effect of a price change is larger than the income effect, but a network externality is negative if the income effect is larger than the substitution effect. O B. consumption by others decreases a typical consumer's marginal utility from consuming the good, but a network externalit is negative if consumption by others increases a typical consumer's marginal utility from the good. O C. the price is lower the more paople own it, but a network externality is negative if the price is lower the fower people own it. O D. the quantity demanded is higher the more people own it, but a network externality is negative if the quantity demanded is lower the more people own it. E. it has a complement, but a network effect is negative if it has a substitute. ve an example of each. n example of a positive network externality is the demand for A. a work of art for exclusivity, and an example of a negative network externality is the demand for a work of art for status. O B. a toy to indulge a fad, and an example of a negative network externality is the demand for computers whose intrinsic value

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

i need help with question 3
Is it reasonable to assume that people seek to equate the marginal utility/price ratios of the goods that they purchase, if they have never heard of ‘utility’, let alone ‘marginal utility’, and marginal utility cannot be measured in any absolute way?
A numeraire good is O A) A good worth money O B) A good whose value is agreed upon O C) A good widely used in trade O D) A good in which the value of other goods is expressed
When goods are complements, there is a direct relationship between the price of one and the demand for the other. O 1) True O 2) False
The figure to the right represents the demand for ice cream cones. Which of the following statements is true? O A. Points a and b may not necessarily be the utility - maximizing quantities of ice cream cones at two different prices because we have no information on the consumer's budget or the price of other goods. B. Points a and b are the utility - maximizing quantities of ice cream cones at two different prices of ice cream. O C. Points a and b are derived independently of the utility - maximizing model. O D. Point a could be a utility - maximizing choice if the price is $3 but point b may not be because we have no information on the marginal utility per dollar when price changes. Price $3 1 3 4 Demand Quantity
18
QUESTION 15 Which of the following statements about an indifference curve is true? O a. The slope tells you the ratio of the prices of the two goods O b. It is unique to a specific consumer O c. A producer can use it to judge consumer demand O d. It is always a curve
Suppose that the following Cobb-Douglas utility function is given U(X,Y) = X³y/2, Which of the following is correct? O Law of diminishing Marginal Utility holds for good Y but not for good X while Law of Diminishing Marginal Rate of Substitution holds. Law of diminishing Marginal Utility holds for good X but not for good Y while Law of Diminishing Marginal Rate of Substitution holds. Law of diminishing Marginal Utility holds for good Y but not for good X while Law of Diminishing Marginal Rate of Substitution fails to hold. Law of diminishing Marginal Utility holds for both goods and Law of Diminishing Marginal Rate of Substitution holds as well
am. 130.
Question 3 Gabriel the consumer, has preferences over goods x and y that are perfect substitutes, where utility is u(x,y) = x+y. He has an income of $152. The price of y is $12. If the price of x falls from $8 to $2, then Gabriel's, optimal choice for good x should rise by units. O 51 O53 55 O 57 --
Question 21 Units of Product Marginal Utility, A (Price = $1) Marginal Utility, B (Price = $1) First Second Third Fourth Fifth Sixth Seventh 16 utils. O 54 utils. Ⓒ70 utils. 12 Ⓒ20 utils. 10 8 6 4 2 0 16 14 12 10 8 4 Refer to the data for a consumer whose income = $4. In equilibrium, the introduction of new product C has increased this consumer's total utility by Marginal Utility, New Product, C (Price = $1) 20 18 16 14 12 10 8
The price of good A will rise if: O a. The demand for good A decreases. O b. The price of a complement for good A decreases. O c. The price of a substitute for good A decreases. Od. The price of a complement for good A increases.