Recall the Application about the price competition between satellite and cable TV services to answer the following question(s).Recall the Application. The introduction of satellite TV service is a form of:
A. price gouging.
B. profiteering.
C. market entry.
D. All of these.
Answer: C
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In Eugene, Oregon, next year there is a 2% chance of an earthquake severe enough to destroy all buildings and personal property
Quincy, who has $3,000,000 in buildings and personal property, has the opportunity to purchase complete earthquake insurance. Which is true? A) Quincy should not purchase earthquake insurance unless he can get it for less than $60,000, because that's all he could possibly lose in an earthquake. B) Quincy should not purchase earthquake insurance unless he can get it for less than $60,000, because that's his expected loss in an earthquake. C) If Quincy buys earthquake insurance, and an earthquake does not occur, he will have received no utility from the transaction. D) What Quincy is willing to pay for the earthquake insurance depends upon his degree of risk aversion. E) Quincy should be willing and able to pay up to $3,000,000 for earthquake insurance.
The sample average of the OLS residuals is
A) some positive number since OLS uses squares. B) zero. C) unobservable since the population regression function is unknown. D) dependent on whether the explanatory variable is mostly positive or negative.
In a free-market economy, the pricing mechanism always operates to
A. produce an equitable distribution of income. B. provide an efficient allocation of resources. C. correct any inequality in distribution of output. D. equate consumers’ desires with ability to pay.
What is the primary basis for determining the U.S. poverty line?
a. Buying power b. Unemployment rates c. State and federal tax rates d. Median family income