tute_1 - Hierachies, incentives and firm structure ECOS3003...

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ECOS3003 Tutorial 1 1 Hierachies, incentives and firm structure ECOS3003 Tutorial 1 1. Question 3-14 in Brickley et al (2009), p. 101. 2. What do you think will happen to the price and quantity of DVD players if: (a) The availability of good movies to play on DVD players increases? (b) Personal income increases? (c) The price of inputs used to produce DVD players decreases? (d) Ticket prices at local movie theatres decline substantially? 3. At the time, many film makers argued that the advent of video would harm the film making industry. Assess this argument. Do you think your arguments apply to DVDs? 4. (a) What are contracting costs? (b) Give a few examples of contracting costs. (c) What effect does the existence of contracting costs have on market economies? 5. Consider an externality between a beekeeper (and her bees) and almond production from an almond orchard. It costs the beekeeper $25 to maintain each beehive. If the beekeeper places her hives near the almond orchard almond production increases by $10 per hive. The benefit to the beekeeper from
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This note was uploaded on 08/24/2010 for the course ECOS 3003 taught by Professor Andrewwait during the One '10 term at University of Sydney.

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tute_1 - Hierachies, incentives and firm structure ECOS3003...

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