FT BSkyB offer set to spark digital television price war: group to give away set-top boxes in battle for subscribers British Sky Broadcasting, the satellite broadcaster, armed itself for a fierce hustle for digital television subscribers yesterday when it said it would give away the 200 set-up bosses needed to receive the new services. BSkyB, which launched 140 digital channels last year, said it would give away the equipment from next month to 'remove all possible barriers to digital take-up". also intends to stop broadcasting using analogue technology by 2002. The move look a set to spark a price war in the industry. On Digital, BSkyB's rival, which launched 30 digital terrestrial channels via roof-top aerials last year, confirmed it planned to give away its own set-top bones for a month. Analysts said yesterday On Digital would have to extend that offer to match BSkyB's. A feeling that BSkyB would win the battle for digital subscribers sent its shares soaring 65.5p to 607p. Meanwhile, shares in Carton Communications and Granada Group, the two ITV companies that own On Digital, closed down 48.Sp at 544 Sp and down 24p at E13.43 respectively. BSkyB also announced it would offer free internet access via personal computers from 1 June and a 40 per cent discount on British Telecommunications telephone calls. In addition, it revealed it had signed up 551,000 digital customers by 3 May. Mark Booth, BSkyB's chief executive, said the announcements were aimed at competing more effectively with the cable industry, which has yet to launch a digital service. Cable customers have discounted phone calls and will not have to pay an upfront charge for digital boxes. Mr Booth brushed off suggestions that BSkylB was feeling threatened by competition from On Digital. "On Digital will be a successful niche player but it will always be in a niche", he said. Stephen Grabiner, chief executive of On Digital, welcomed RSkyl's plans. He said BSkyB's decision to cease analogue transmissions would enable the government to feel more comfortable about switching off the terrestrial analogue signal. He hinted that On Digital would match BSkyB's offer. BSkyB said the cost of acquiring cach new subscriber would be E155. It is suspending dividend payments in favour of investing in digital. BSkyB is setting aside 31Sm to pay for the free transfer of its analogue subscribers to digital. However, Martin Stewart, chief financial officer, said switching off analogue transmissions would give BSkyB annual savings of ES0m. BskyB is increasing the monthly charge for many of its channels. Cable & Wireless Communications, the UK's biggest cable operator, said its 200-channel digital television service would be launched in Manchester and the north west on 1 July. It hoped to sign up about 200,000 customers during the first year and said it would always be able to charge less than BSkyB. But it warmed that launching the channels would hit pre-tax profits. Question : With reference to Case study 4.2, which theoretical model of oligopoly best explains the behaviour of the leading firms in the UK's market for digital television services?

Suppose a toy craze in Canada makes a particular Swiss-produced toy very popular. What effect would this toy have on the balance of trade? It would tend to affect Canada's balance of payments but not its balance of trade It would tend to increase Canada's balance of trade deficit. It would tend to reduce any existing balance of trade deficit in Canada. It would tend to increase Canada's balance of trade surplus. Suppose the exchange rate between British pounds and Canadian dollars is originally $1.50 per pound. If it then changes to $2 for 1 pound, what will tend to happen to the volume of imports of British goods into Canada? The volume of imports will tend to rise The volume of imports will tend to change in an indeterminate direction The volume of imports will tend to fall. O The volume of imports will tend to stay the same1. The U.S. trade balances in May and June 2018 were -$43.2 billion and -$46.3 billion. a. Over this period, what happened to the following? 1) Domestic investment and domestic savings 2) Foreign savings b. How are the following Balance of Payments accounts affected by these U.S. trade imbalances? 1) Current account 2) Capital/financial account 3) Official reserve transactions\fQUESTION 1 All risk that stockholders bear should be compensated with higher expectations for returns True False. Only firm risk compensates through higher expected returns )False, Only market risk compensates through higher expected returns False. Only interest rate risk compensates through higher expected returns QUESTION 2 For the majority of stocks, what percentage of their returns fall between 1 and 2 standard deviations away from their average return? About equal to 27% Greater than 279% Less than 2796 About 13.5%3/4 9. All other things equal, consumer surplus is higher when the demand curve is more ; producer surplus is greater when the supply curve is more A) inelastic, elastic B) inelastic, inelastic C) elastic, elastic D) elastic, inelastic 10. The First Fundamental Theorem of Welfare Economics states that: A) the competitive equilibrium, where supply equals demand, can always be achieved through government intervention