A particular cable TV company requires a household to subscribe to its high-speed Internet service if it subscribes to cable TV, and vice versa. This practice
a. is referred to as tying.
b. is regarded by some economists as a form of price discrimination.
c. is controversial among economists because they disagree on whether it has adverse effects for society as a whole.
d. All of the above are correct.
d
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Suppose that inflation is at the target rate and output has fallen substantially below potential output. A central bank with a primary objective of price stability should ________
A) do nothing, because inflation cannot rise when unemployment is high B) ease monetary policy, to avoid a decrease in the inflation rate C) do nothing, because stabilizing economic activity is not a primary objective D) ease monetary policy, because avoiding high unemployment is more important than avoiding high inflation E) none of the above
Monopolistic competition tends to lead firms to have wasted capacity. Why?
The ________ the time period, the ________ is the present value of a given future payment, all other things held constant.
a. longer; lower b. shorter; lower c. longer; higher d. shorter; the more uncertain
Monopolistically competitive firms have ________ market power due to producing differentiated products.
A. no B. unlimited C. complete D. some