Question

The markets for movie theater tickets and video cassette rentals are highly interdependent. Suppose that a tax is imposed on movie theater tickets. The type of analysis that examines the effects of this tax on the markets for movie theater tickets and video cassettes simultaneously is called:

Answer 1

Answer:

General equillibrum analysis.

Explanation:

General equillibrum analysis is a method that attempts to analyse demand and supply in a market that has many goods or markets that are interdependent. It tries to prove that interactions of demand and supply will result in equillibrum.

General equillibrum therefore occurs when the product and the various factor markets are in equillibrum.

The market for movie tickets and video rentals are interdependent. The analysis of the effect of a tax on movie theatre tickets is use of general equillibrum analysis.