This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If cable TV subscriptions and movie rentals are substitutes for each other, what is the effect in ... (Read 60 times)

cartlidgeashley

  • Hero Member
  • *****
  • Posts: 572
on: Jun 29, 2018
If cable TV subscriptions and movie rentals are substitutes for each other, what is the effect in each of these markets of an increase in wages for people who work for the cable TV company? Use your analysis to determine the sign of the cross
 
  elasticity of demand between the quantity of movie rentals and the price of cable TV.

Question 2

The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake.
 
  According to the Coase Theorem, if the transactions costs are low and there are only a few people involved, the output will equal ________ tons of paper if ________ own the lake. A) 3; only the lakeside residents
  B) 3; either the firms or lakeside residents
  C) 4; the firms
  D) 4; either the firms or lakeside residents


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

cdmart10

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 29, 2018
Answer to Question 1

The supply curve of cable TV shifts leftward because wages are a cost of production, so the price of cable TV rises. Cable TV subscribers decrease the quantity of cable TV they demand (they move leftward along their demand curve for cable TV). Cable TV subscribers increase their demand for movie rentals (the demand curve for movie rentals shifts rightward) so that the equilibrium price and quantity of movie rentals both increase. Hence, when the price of cable TV goes up then the quantity of movie rentals increases, so their cross elasticity of demand is positive.

Answer to Question 2

B


cartlidgeashley

  • Member
  • Posts: 572
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

sultansheikh

  • Member
  • Posts: 335
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Schematic depiction of the hydrophobic effect Schematic depiction of the hydrophobic effect
Effect of Perceived Price of a Drug on Placebo Analgesia Effect of Perceived Price of a Drug on Placebo Analgesia
Effect of the activation energy barrier. Effect of the activation energy barrier.
Effect of antidiuretic hormone deficiency. Effect of antidiuretic hormone deficiency.
First-Pass Effect First-Pass Effect
Lake Effect Snow Lake Effect Snow
Video: Appendicitis Animation

For a complete list of videos, visit our video library