Recall the Application about the price competition between satellite and cable TV services to answer the following question(s).Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, the price of the cable TV service usually:
A. increases.
B. decreases.
C. initially increases, then decreases.
D. is unaffected.
Answer: B
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Some economists believe that the economy benefits from firms having market power. Which of the following is an argument that has been made to support this position?
A) Large firms are better able than small firms to spend funds on research and development required to develop new products. B) Research has shown that the deadweight loss from monopolies is a small percentage of the value of production in the United States. C) Competition is very rare in the U.S. economy and few new products are produced by smaller, competitive firms. D) Large firms can afford to lobby the U.S. government in order to impose restrictions on imports and reduce the outsourcing of jobs to other countries.
One reason for the short-run aggregate supply curve (SRAS) is:
A. a fixed CPI market basket. B. perfect knowledge of workers. C. fixed-wage contracts. D. the upward-sloping production function.
Which of the following is an example of a price ceiling?
A. the minimum wage B. rent controls C. agricultural price supports D. None of these is correct.
The reason that the impact on prices of decriminalization is ambiguous is that decriminalization causes a price
A. decreasing supply curve movement and a price increasing demand curve movement. B. decreasing supply curve movement and a price decreasing demand curve movement. C. increasing supply curve movement and a price decreasing demand curve movement. D. increasing supply curve movement and a price increasing demand curve movement.