September 2023 Business Finance Assignment
Ques 1: Some opponents of the death penalty are opposed to executing individuals who have been convicted of murder because they believe that murder is an irrational act and that rising the price of murder through capital punishment thus will not have a deterrent effect on prospective murders. If those opponents are correct in their view of murder being an irrational act, depict what the demand curve for murder looks like. What is the price elasticity of demand for murder according to this view?
Ques 2: In the antitrust case brought by the Justice Department against Microsoft, explain why the cross-price elasticity of demand between rival operating systems such as Linux and Microsoft’s own MS-DOS system might have been of interest in determining Microsoft’s ability to control the prevailing price in the operating system market.
Ques 3: Consider the case of shopping for a Valentine’s Day present. What is likely to be your price elasticity of demand the less time you leave to shop for the present in advance of Valentine’s Day, everything else being equal? Explain.
Ques 4: A show by U2 in the New York City areas was an instant sellout due to major purchasing of tickets by Ticketmaster. Just as quickly, however, thousands of ticket listings started appearing on TicketsNow.com, a Ticketmaster subsidiary, where fans and brokers flip tickets, often at prices far above face value. For example, one $253 face-value ticket for a seat near the stage was listed for $10,000. The state of New York’s anti-scalping laws were suspended in 2007. Should they be reinstated to prevent such “consumer rip offs,” as they have been termed by certain policymakers who also believe that there is no benefit to consumers from allowing tickets to most large events to be resold at any price?
Ques 5: With regard to Applications 2.4, what would you predict to be the effect of the ban on vacation home building, all else equal, on hotel room rates at Swiss Alpine locations? How about on the price of vacation homes in nearby French and Austrian Alpine locations? Explain.
Ques 6: In August 2013, after contentions debate in congress, President Obama signed into law a bill reporting lower interest rates for college student loans. President Obama pledged that the hard-fought compromise with legislative representatives would be just the first step in a broader, concerted fight to reign in the cost of a college education. Evaluate the validity of the President’s statement and whether government-subsidized lower interest rates for student loans reduce or increase the cost of college education.