Which might be a possible reason a cable television operator want to bundle channels together in packages ("tiers")?
a. delivering many channels to the consumer is not much more costly than delivering a few.
b. simplifies the consumer's choice and perhaps lowers administrative costs.
c. allows the firm to extract revenue from a consumer even if it does not know exactly which channels the consumer likes the most..
d. all of the above.
d
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The stricter the enforcement of a price ceiling, the
A) smaller is the difference between the black market price and the legal market price of the good. B) larger is the difference between the black market price and the legal market price of the good. C) greater is the amount of the good available in total, from either the legal market or the black market. D) Both answers B and C are correct.
Which of the following statements best describes the economic short run?
A) It is a period during which at least one of the firm's inputs is fixed. B) It is a period during which fixed inputs become variable inputs because of depreciation. C) It is a period during which firms are free to vary all of their inputs. D) It is a period of one year or less.
Say a study reveals that price elasticity of demand for teenage smoking was -0.5. If the government imposed a tax on cigarettes the total expenditure teenagers spend on buying cigarettes would
A. decrease. B. stay the same. C. increase. D. we can't answer with the information given.
The cost-minimizing rule is that a firm should utilize inputs such that the marginal physical product of an input divided by the price of the input is the same for all inputs. This is also the profit-maximizing rule because
A) we obtain the profit-maximizing rule by multiplying each ratio by the marginal revenue produced. B) we obtain the profit-maximizing rule by multiplying each ratio by the product price, which is the same for each input. C) the profit-maximizing rule is just the inverse of the cost-minimizing rule. D) they are exactly the same.