SCENARIO: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer a) Most plasma TVs sold in the United States are imported from Japan. If the United States government reduces the number of plasma TVs that can be imported into the United States, ceteris paribus, what would happen? b) To raise additional revenues, the government imposes an entertainment tax on movie tickets, but there are no new additional taxes levied on rented DVDs. This would lead to c) You observe that the rental price for DVDs is higher in the winter than in the summer. This would be explained by the fact that d) The number of stores renting DVDs is reduced by 25%, reducing the number of DVDs available. What would happen?
SCENARIO: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer
a) Most plasma TVs sold in the United States are imported from Japan. If the United States government reduces the number of plasma TVs that can be imported into the United States, ceteris paribus, what would happen?
b) To raise additional revenues, the government imposes an entertainment tax on movie tickets, but there are no new additional taxes levied on rented DVDs. This would lead to
c) You observe that the rental price for DVDs is higher in the winter than in the summer. This would be explained by the fact that
d) The number of stores renting DVDs is reduced by 25%, reducing the number of DVDs available. What would happen?
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