Exhibit 30-5 ​

question 94

Multiple Choice

Exhibit 30-5
​

-Refer to Exhibit 30-5. If a positive externality exists, then the external benefits associated with the positive externality equal the distance between points __________, and the market output is __________.

• A)A and C; Q₂
• B)B and D; Q₁
• C)C and A; Q₁
• D)B and C; Q₁
• E)b and c

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Definitions:

Block Booking

The practice whereby distributors forced exhibitors to rent their films in large groups, or “blocks,” in advance of production, with the blocks tied to several desirable titles as well as films exhibitors would otherwise not book. Block booking was ruled illegal by the U.S. Supreme Court as part of the 1948 Paramount decision.

Exhibitors

Refers to businesses or individuals that present artistic or educational materials, such as films or artworks, to the public.

House Un-American Activities Committee

A committee of the U.S. House of Representatives, established in 1938, that conducted investigations into alleged disloyalty and subversive activities on the part of private citizens, public employees, and those organizations suspected of having Communist ties.

Paramount Decision

A 1948 United States Supreme Court decision that effectively broke up the studio trusts by forcing divestiture, the sale of the studios’ movie theaters.