Section 3,4
Questions on Ch3
1- How does the media of transmission affect the accessibility of information
products?
a) It limits access to certain users.
b) It makes information products universally accessible.
c) It has no impact on accessibility.
d) It increases the cost of accessing information products.
2- In which situation does increasing returns to scale occur?
a) When total output increases proportionately more than the increase in total
inputs.
b) When total output increases less than proportionately to the increase in total
inputs.
c) When total output increases proportionately to the increase in total inputs.
d) When total output remains constant despite increases in total inputs.
3- What distinguishes information products from physical products?
a) Their material form
b) Their arrangement of symbols
c) Their size and weight
d) Their market demand
4- Which of the following is NOT an example of an information product?
a) Computer software
b) Mobile apps
c) Automobiles
d) Music and videos
5- What characteristic of information products leads to an incentive problem?
a) High fixed costs
b) Uniqueness
c) Intellectual property rights
d) Constant returns to scale
6- What contributes most to the cost of producing information products?
a) Material form
b) Intellectual property rights
c) Development and content creation
d) Transportation costs
7- What is the primary purpose of intellectual property rights for information
products?
a) To encourage piracy
b) To protect consumers
c) To address the incentive problem
d) To increase production costs
8- How do information products differ from physical products in terms of
returns to scale?
a) Information products exhibit decreasing returns to scale
b) Physical products exhibit constant returns to scale
c) Information products exhibit increasing returns to scale
d) Physical products exhibit constant returns to scale
9- What role does the media of transmission play in information products?
a) It determines the market demand.
b) It defines the uniqueness of the product.
c) It is a factor in the incentive problem.
d) It serves as a carrier for the arrangement of symbols.
10- What does decreasing returns to scale imply for average total cost as
output increases?
a) Average total cost decreases.
b) Average total cost remains constant.
c) Average total cost increases.
d) Average total cost fluctuates.
11- True or False: Information products are valued for their material form. false
12- True or False: Markets for information products can be perfectly
competitive. false
13- True or False: The cost of producing an information product is largely
dependent on the number of copies sold. false
14- True or False: Intellectual property rights help address the incentive
problem associated with information products. True
15- True or False: Uniqueness is a characteristic that contributes to the
monopoly element in markets for information products. True
16- True or False: The majority of costs for information products are variable
costs. false
17- True or False: Transportation costs for information products are generally
high. false
18- True or False: Intellectual property rights include patents and copyrights. True
19- True or False: The value of information products lies in their physical
form. false
20- True or False: Information products exhibit decreasing returns to scale. false
21- True or False: Quasi-public goods have characteristics of both public and
private goods. True
22- True or False: Information products are always excludable. false
23- True or False: Pure public goods are always non-rival in consumption. True
24- True or False: Increasing returns to scale in information product
production imply higher average total costs. false
25- True or False: Intellectual property rights play no role in the treatment of
information products. false
