Weekly Review Quiz as of 2008-02-21
Economics:Micro
As Toshiba Surrenders, What's Next for DVDs?
by Sarah McBride and Yukari Iwatani Kane
02/18/2008
http://online.wsj.com/article/SB120321618700574049.html?mod=djem_jiewr_ecq
1. Toshiba Corp. has decided to surrender to Sony Corp. in the long and brutal format war over
high-definition DVDs because
a) Sony has sued Toshiba over patent infringements.
b) the cost of manufacturing Toshiba’s HD DVD players is so great that Toshiba cannot compete
with Sony’s low-price Blu-ray DVD players.
c) consumers, once loyal to HD DVD, have been abandoning their Toshiba machines and
purchasing Blu-ray DVD machines.
d) Sony has purchased the exclusive rights to the HD DVD technology, with the intention of
removing the players from the market.
* e) Best Buy Co. and Wal-Mart Stores Inc. have agreed to throw their weight exclusively behind
the Sony technology.
2. The payoffs to Sony from Toshiba dropping out of the market will not be immediate because
* a) DVD-replication factories that stamp out high-definition discs are not quite ready for Bluray’s victory.
b) studios that supported HD DVD are not willing to switch to Blu-ray technology.
c) Sony does not have the plant capacity to increase the production of Blu-ray players.
d) consumers are satisfied with standard-definition DVD players.
e) with Toshiba dropping out of the market, the prices of Blu-ray players will not increase.
Antitrust Fears Few in Airline Deal
by Susan Carey
02/20/2008
http://online.wsj.com/article/SB120347264078878775.html?mod=djem_jiewr_ecq
3. The proposed Delta Air Lines Inc. and Northwest Airlines Corp. merger is like past mergers
approved by the U.S. Department of Justice in the past in the sense that
a) these mergers have been considered during the Bush administration.
* b) have not involved overlap of the markets served by the firms involved in the merger.
c) consumers have not opposed the mergers.
d) the employees have approved the mergers.
e) the mergers have involved friendly takeovers.
4. The possible negative impacts of airline merger discussed in the article are
a) the anticompetitive effects.
b) the employee layoffs.
c) the added costs to the airlines.
* d) the anticompetitive effects and employee layoffs.
e) the anticompetitive effects, employee layoffs and added costs to the airlines.
Big Retail Chains Dun Mere Suspects in Theft
by Ann Zimmerman
02/20/2008
http://online.wsj.com/article/SB120347031996578719.html?mod=djem_jiewr_ecq
5. In the “civil recovery” of suspected shoplifters – used as a shoplifting deterrent and to recover
damages – law firms hired by large retailers
a) prosecute suspected shoplifters.
b) do not permit suspected shoplifters to return to the stores.
* c) demand monetary payments from suspected shoplifters and promise not to sue if paid
quickly.
d) require suspected shoplifters to perform community service.
e) humiliate shoplifters by handcuffing them at the fronts of stores.