(Consider This) Brinley is the hottest new pop singer, but his agent discovers that Internet sales of Brinley's music have been poor due to Internet piracy, but concerts are regularly sold out and merchandise (such as T-shirts) sells well. If Brinley
wants to enhance profits, economists would most likely recommend that he:
A. charge more for downloads, concerts, and merchandise.
B. cut prices for downloads, concerts, and merchandise.
C. only give concerts.
D. keep prices of downloads low and raise prices for concerts and merchandise.
Answer: D
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In economics we learn that
A) tradeoffs allow us to have more of everything we value. B) tradeoffs allow us to avoid the problem of opportunity cost. C) opportunity costs are all of the possible alternatives given up when we make a choice. D) None of the above answers is correct.
One problem with cost-plus regulation is that:
A. government ownership is often inefficient. B. consumers would be willing to pay more for higher quality goods. C. it blunts regulated firms' incentives to cut costs. D. there is no way for a regulated firm's owners to recoup their opportunity costs.
Fill in the table.
An international financial crisis is
A. when a major bank defaults. B. when a world leader is deposed from office. C. the rapid withdrawal of foreign investments and loans from a nation. D. when at least one developing country defaults on its loans.