Refer to Scenario 3

question 24

Multiple Choice

Refer to Scenario 3.1 below to answer the question(s) that follow.
SCENARIO 3.1
-Streaming movies and movies shown in theaters are substitutes.
-Streaming movies and OLED TVs are complements.
-OLED TVs and movies shown in theaters are normal goods.
-People watch streaming movies more often in the winter than in the summer.
-Refer to Scenario 3.1. To raise additional revenues, the government imposes an entertainment tax on movie tickets, but there are no new additional taxes levied on streaming movies. This would lead to

• A) an increase in the price of movie tickets, but no change in the price of streaming movies.
• B) an increase in the price of movie tickets and the price of streaming movies.
• C) an increase in the price of a movie ticket and a decrease in the price of streaming movies.
• D) no change in the price of a movie ticket and an increase in the price of streaming movies.

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Definitions:

Department of Commerce

A division of a government that is concerned with promoting economic growth, trade, and market regulations.

Factoring

The practice of raising funds for a business through the sale of accounts receivable.

Finance Company

A business that provides loans to individuals or other companies, typically specializing in sectors like consumer finance, vehicle financing, or business loans.

SBA Express Program

A loan program offered by the U.S. Small Business Administration (SBA) that provides quicker financing solutions to small businesses with simplified paperwork.