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question 53

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Use the information below to answer the following questions.
Fact 6.5.1 Hollywood: Organized Crime Hits the Movies
The Mexican army seized 1,180 disc burners and 3.14 million copies of movies and TV shows from 23 warehouses in a move to fight piracy that costs Hollywood about $590 million a year.
Source: Bloomberg, Businessweek, April 7, 2011
Assume that the marginal cost of producing a DVD (legal or illegal) is a constant $3 and that legal DVDs bear an additional marginal cost of $5 each in royalty payments to film studios.
-Refer to Fact 6.5.1. With no penalty on buyers, if a penalty for breaking the law is imposed on sellers at more than $5 a disc, the equilibrium price of an illegal disc

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Definitions:

Simple Tasks

Activities or tasks that require a minimal amount of cognitive or physical effort to complete.

Industrial/Organizational Psychologists

Professionals who apply psychological principles and research methods to improve the workplace environment, productivity, and employee-related issues.

Psychotherapy

A therapeutic treatment involving psychological techniques to improve mental health and well-being.

Need For Achievement

A personal motivation to accomplish tasks of increasing difficulty, excel in achievements, and attain high standards.

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