Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 3, Problem 2P
To determine
Market forces decides the types of movies to produce.
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You bought a ticket for a concert of Taylor Swift in Manchester for £400. If you want, you can return the ticket for a full refund up to the start of the concert. You were willing to pay up to £600 for that ticket. The train ticket from your home to Manchester and return costs £150. There are no other costs of going to the concert. You realise now that the concert is sold out. After checking various websites, you receive a firm offer for your concert ticket of £2100. If you do not go to the concert, your next best alternative for that day is watching a pay-per-view video of an Amy McDonalds concert on Netflix for £50 at home. Your willingness to pay for the pay-per-view video is £300 (Your willingness to pay for the concert ticket does not change over time.)
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Refer to the Front Page to answer three questions.
FRONT PAGE
March Madness Becomes Sadness
Ticket prices for the college basketball championships always skyrocket when the
68-team draw is announced. And they jump even further as the Final Four teams
emerge. The year 2020 was no different. The 700 floor seats that are sold to
students for $40 apiece were already reselling for as much as $4,670 in early
January. If the history of March Madness is a guide, those tickets could have sold
for more than $10,000 each once the Final Four teams were known. In 2020,
however, there wasn't a Final Four: Fear of the coronavirus convinced the NCAA
to cancel that year's tournament. The only madness was among those that
paid scalpers' prices for tickets that got only $40 refunds.
Source: Media reports, March 10-14, 2020.
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The Agriculture Research Center of a country (a government organization) introduced a new and innovative irrigation
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