Question 1

Copyright protection discourages the production of new software.

Accepted Answer

A) True 
 B)False

Question 2

Professor Kremepuff has published a new textbook.This book will be used in classes for two years, at which time it will be replaced by a new edition.The publisher charges a price of $p1 in the first year and $p2 in the second year.After the first year, bookstores buy back copies from students for $ p2/2 and resell them to students in the second year for $p2.(Students are indifferent between new and used copies.)The cost to a student in the first year of owning the book for a year is therefore $(p1 - p2/2).In the first year of publication, the number of students willing to pay $v to own the book for a year is 70,000 - 1,000v.The number of students taking the course in the first year who are willing to pay at least $w to keep the book for reference rather than resell it is 70,000 - 5,000w.In the second year, the number of students who have not previously taken the course and are willing to pay at least $p for a copy of the book is 60,000 - 1,000p.If the publisher sets a price of $p1 in the first year and $p2 in the second year, with p1 B3 p2, then the total number of copies that the publisher sells over two years will be equal to

Accepted Answer

A) 130,000 - 1,000(p1 + p2/2). 
B) 140,000 - 1,000(p1 - p2/2). 
C) 140,000 - 1,000p1 - 1,000p2. 
D) 140,000 - 3,000p2. 
E) 130,000 - 1,500p2. 
A) 130,000 - 1,000(p1 + p2/2). 
B) 140,000 - 1,000(p1 - p2/2). 
C) 140,000 - 1,000p1 - 1,000p2. 
D) 140,000 - 3,000p2. 
E) 130,000 - 1,500p2.

Question 3

Our old friend Edmund Stench from Chapter 2 has now grown up and is in the business of producing punk rock DVDs.He must choose between selling his DVDs to final consumers, or selling his DVDs to firms that will rent them to the public.Which of the following factors would make rentals more attractive than sales?

Accepted Answer

A) A large number of people interested in viewing punk rock DVDs 
B) Large transaction costs of renting 
C) high cost of making DVDs relative to transaction costs of renting 
D) A small number of people interested in viewing punk rock DVDs 
E) High fixed costs of production 
A) A large number of people interested in viewing punk rock DVDs 
B) Large transaction costs of renting 
C) high cost of making DVDs relative to transaction costs of renting 
D) A small number of people interested in viewing punk rock DVDs 
E) High fixed costs of production

Question 4

A group of 13 consumers are trying to decide whether to connect to a new communications network.Consumer 1 is of type 1, consumer 2 of type 2, consumer 3 of type 3, and so on.Each consumer's willingness to pay to belong to the network is proportional to the number of consumers who belong.Where k is the number of consumers who belong, the willingness to pay of a type n consumer is equal to k times n.What is the highest price at which 9 consumers could all connect to the network and either make a profit or at least break even?

Accepted Answer

A) $47 
B) $50 
C) $43 
D) $42 
E) $45 
A) $47 
B) $50 
C) $43 
D) $42 
E) $45

Exam 34: Information Technology-Part A

Copyright protection discourages the production of new software.

Budget Constraint-Part A

Budget Constraint-Part B

Preferences-Part A

Preferences-Part B

Utility-Part A

Utility-Part B

Choice-Part A

Choice-Part B

Demand-Part A

Demand-Part B

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters