Deck 2: Various Economic and Issues

Question 1

The price charged by a monopoly hardware firm .

A)increases with consumers' love for software variety parameter, ?; consumers' income, ?; and the number of consumers buying this machine, ?
B)decrease with consumers' love for software variety parameter, ?; consumers' income, ?; and the number of consumers buying this machine, ?
C)increases with consumers' love for software variety parameter, ?; consumers' income, ?; and decrease in the number of consumers buying this machine, ?
D)increases with consumers' love for software variety parameter, ?; decrease in consumers' income, ?; and the number of consumers buying this machine, ?

Answer 1

increases with consumers' love for software variety parameter, ?; consumers' income, ?; and the number of consumers buying this machine, ?

Question 2

An increase in consumers' preference for variety of software .

A)increases both hardware prices and profits.
B)decreases both hardware prices and profits.
C)increase hardware prices and decrease profits.
D)decrease hardware prices and increase profits.

Answer 2

decreases both hardware prices and profits.

Question 3

Equilibrium duopoly hardware prices and profits are higher when the machines are compatible than when they are incompatible.

Answer 3

True

Question 4

When there are two software industries, each producing brand-specific software, an increase in the degree of compatibility of the A- machine with the software written for the B- machine,

A)will reduce the variety of software specifically written for the A machine
B)will increase the variety of software specifically written for the A machine
C)will reduce the variety of software specifically written for the B machine
D)none of the above.

Question 5

Support-oriented consumers would prefer buying software over pirating software .

A)if p > ?q; i.e., if the price of the software package exceeds the value of service provided by the software firm to its legal users.
B)if software is not copy protected.
C)if service provided by software firm is not available.
D)if p ? ?q; i.e., if the price of the software package does not exceed the value of service provided by the software firm to its legal users.

Question 6

 ---------------------- occurs when a new technology replaces an old technology, but the old technology yields a higher utility (or profit) to both users than the new technology.

A)Excess momentum
B)Excess inertia
C)Excess immobility
D)Excess retreat

Question 7

The duration of each technology, ?,

A)decreases with the population size of each generation, ?, and decreases with the technology-growth parameter, ?.
B)increases with the population size of each generation, ?, and the technology-growth parameter, ?.
C)increases with the population size of each generation, ?, and decreases with the technology-growth parameter, ?.
D)decreases with the population size of each generation, ?, and increases with the technology- growth parameter, ?.

Question 8

When consumer preferences exhibit international network externalities, both countries are better off when both countries mutually recognize foreign standards than when both countries do not recognize foreign standards.

Question 9

Entry into the telecommunication industry -------------- the utility of the already connected consumers whereas the utility of newly connected consumers --------------------.

A)increases, also increase
B)decreases, increases
C)increases, remains u
D)decreases, remains

Question 10

Suppose that all technologies have the same duration. Then the frequency of technology revolutions (or new-technology adoption), denoted by f is

A)f ? 1/?(g+?).
B)f ? ?/ ?
C)f ? ?/?.
D)f ? 1/?.

Question 11

The duration of each technology, ?,----------------with the population size of each generation, ?, and with the technology-growth parameter, ?.

A)increases, decreases
B)increases, increases
C)decreases, increases
D)decreases, decreas

Question 12

The at a price (connection fee) p0 is the minimal number of customers needed to ensure that at least this number of consumers will benefit from subscribing to the service at the fee p0.

A)critical weight
B)critical mass
C)critical volumn
D)weight

Question 13

In order to connect each consumer to the network of services, the monopoly has to spend ? units of money, where _ .

A)? > ?
B)? < ?
C)? = ?
D)? >= ?

Question 14

Suppose that the incumbent and the entrant in the long-distance phone call market compete in prices (rates). Then,                                         _.

A)under the ECPR, only entrants with unit cost ?E > ?I will enter the long- distance phone-call industry.
B)under the ECPR, only entrants with unit cost ?E < ?I will enter the long-distance phone-call industry.
C)under the ECPR, only entrants with unit cost ?E ? ?I will enter the long-distance phone-call industry.
D)under the ECPR, only entrants with unit cost ?E = ?I will enter the long- distance phone-call industry.

Question 15

The for assigning scarce frequency band is inefficient as there is a strictly positive probability that frequency will be assigned to the less efficient firm.

A)lottery system
B)auction process
C)first-come-first-serve
D)administrative proc

Question 16

In------------------the government fails to extract all the rents associated with giving away the frequency band to the private sector.

A)lottery system
B)auction
C)first-come-first-serve
D)administrative proc

Question 17

In order to ensure that foreclosures will not take place, regulators should allow all service providers to sell the entire variety of telecommunication, broadcasting, and Internet services.

Question 18

Information is reproduced if each agent (the provider and each consumer) makes one copy for the benefit of another consumer.

A)Horizontally
B)Vertically
C)Mixed
D)None of the above

Question 19

Section 170 of Copyright Act states: "the fair use of copyrighted work ... for purposes such as criticism, comment, newsreporting, teaching (including multiple copies for classroom use), scholarship, or research, is an infringement of copyright."

Question 20

Under either vertical or horizontal information reproduction, total surplus enjoyed by the ? consumers is ----------------------.

A)higher when information is printed compared with digital information.
B)higher when information is digital compared with printed information.
C)the same when information is digital or printed.
D)None of the above

Question 21

The amount of uncaptured consumer surplus when information is digital exceeds the amount of uncaptured surplus when information is printed

Question 22

An increase in journal photocopying  --------------- library's value and hence funding, which in turn allows journal publishers to increase subscription fees.

A)decreases
B)increases
C)doesn't impact
D)None of the above

Question 23

Selling to libraries yields a higher profit to the publisher than selling directly to readers when:

A)books are not costly to produce.
B)there are more libraries relative to the number of readers.
C)readers do not place a high value on owning the book.
D)None of the above

Question 24

The profit level of a bank declines when it makes its ATMs available for the customers of a competing bank.