If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that
A) the number of iTunes music downloads would increase.
B) there would be no change in the demand for iTunes music downloads.
C) the number of iTunes music downloads would decrease.
D) iTunes music supply would change but demand would not.
Answer: C
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In the United States the richest 20 percent of households receive about ________ of total income
A) 10 percent B) 20 percent C) 50 percent D) 80 percent
Refer to Figure 2-17. One segment of the circular flow diagram in the figure shows the flow of funds from economic agents E to market F. Who are economic agents E and what is market F?
A) E = households; F = product markets B) E = households ; F = factor markets C) E = firms; F = product markets D) none of the above
When an external cost exists that is NOT taken into account in the production of a product,
A. the level of output is too low, and the supply curve should shift to the right to account for the externality. B. the level of output is too high, and the supply curve should shift to the left to account for the externality. C. the price of the product is too high, and production should be expanded to lower the price. D. the level of output is optimal, and there should be no change in the supply curve.
Bill sells Mary a worthless coin that Bill deviously told Mary "belonged to an ancient Persian king and is of enormous value to coin collectors." Economists would call this an
A. efficient exchange, as any type of voluntary exchange promotes efficiency. B. inefficient exchange because there were externalities involved. C. inefficient exchange, as at least one party used false market information. D. efficient exchange, assuming Bill was not intentionally trying to trick Mary.