Use the Following Statements to Answer This Question

question 24

Multiple Choice

Use the following statements to answer this question:
I. A network externality is a situation in which each individual's demand depends on the purchases of other buyers.
II. Network externalities are mainly positive effects resulting from the actions of others, while ordinary externalities are mainly negative effects resulting from the actions of others.

• A) I and II are true.
• B) I is true and II is false.
• C) I is false and II is true.
• D) I and II are false.

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Definitions:

Focal Object

An entity or concept that is the primary focus of attention or analysis.

Perception

The process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

Primacy Effect

A perception problem through which an individual assesses a person quickly on the basis of the first information encountered.

Recency Effect

A perception problem through which we use the most recent information available to assess a person.