Macroeconomics 11th Edition by Michael Parkin

Exercise 6

Economics in the News
Lots of Little Screens
Inexpensive broadband access has created a generation of television producers for whom the Internet is their native medium. As they redirect the focus from TV to computers, cell phones, and iPods, the video market is developing into an open digital network.
a. How has inexpensive broadband changed the production possibilities of video entertainment and other goods and services?
b. Sketch a PPF for video entertainment and other goods and services before broadband.
c. Show how the arrival of inexpensive broadband has changed the PPF.
d. Sketch a marginal benefit curve for video entertainment.
e. Show how the new generation of TV producers for whom the Internet is their native medium might have changed the marginal benefit from video entertainment.
f. Explain how the efficient quantity of video entertainment has changed.