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Chapter 03: Media Economics
Chapter 03: Media Economics
Multiple Choice Single Select
1) An economic system in which private owners operate businesses for profit is called
a) socialism.
b) capitalism.
c) fascism.
d) new-world economics.
2) With rare exception, the primary goal of most U.S. mass media is to
a) make profits.
b) provide news and information to the masses.
c) entertain.
d) provide an exchange of ideas.
3) Mass media industries earn most of their revenue from
a) subscriptions and advertising.
b) advertising and classifieds.
c) sales and subscriptions.
d) advertising and sales.
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4) Jessie comes across a headline in her Facebook feed. She clicks on the headline and is taken
to a small section of content. She wants to read more, but she is informed that she must
subscribe to read the rest of the article. This situation is an example of a
a) paywall.
b) click-through site.
c) pop-up.
d) capitalist link.
5) When Gannett Corporation diversified and began acquiring radio and television stations,
billboards, magazines, and other enterprises in addition to newspapers, it
a) became a newspaper chain.
b) moved into the category of media conglomerate.
c) surpassed Rupert Murdoch’s News Corp. in size and revenue.
d) was able to reach an audience larger than Facebook’s.
6) One trait of media conglomerates is
a) eliminating boards of directors at any newly-acquired subsidiaries.
b) having day-to-day decisions for all subsidiaries made in one centralized, executive office.
c) ownership of subsidiaries that remain distinct operating entities.
d) ownership of some subsidiaries whose business does not involve communication.
7) Conglomerates typically use all the following business practices EXCEPT
a) board-level micromanagement of all aspects of their operations.
b) day-to-day decision-making is done by appointed middle managers.
c) major policy and profit expectations are set by a board of directors.
d) performance-based evaluation systems treat underachievers as expendable.
8) The recession that began in 2007 resulted in media conglomerates
a) buying more companies.
b) experiencing increased profits.
c) merging with other conglomerates.
d) engaging in panic-driven divestiture.
9) Media tycoon Rupert Murdoch controls a diverse media empire that includes the
a) Wall Street Journal.
b) New York Times.
c) Washington Post.
d) Chicago Tribune.
10) Rupert Murdoch, who controls News Corp. and other media ventures, is well known for his
a) disdain for opportunism.
b) lackadaisical approach in setting goals.
c) profit-driven motivation.
d) unwillingness to correct impetuous decisions.
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11) If Company XYZ produces a magazine solely for its employees, that publication is a
________ magazine.
a) general-interest
b) sponsored
c) pulp
d) targeted-subscriber
12) Established in 1908, the Christian Science Monitor is sponsored by the
a) United Church of Christ.
b) Clergy for Science.
c) Christian Science Church.
d) Scientists for Christ.
13) The Christian Science Monitor is known for its
a) solution-based journalism.
b) sensational coverage of world affairs.
c) preachy style of journalism.
d) crossword puzzle.
14) Who founded the Christian Science Monitor?
a) Rupert Murdoch
b) Mary Baker Eddy
c) Helen Gurley Brown
d) Joseph Pulitzer
15) Which of the following has NOT been considered as an alternative to traditional ways of
funding mass media in the United States?
a) changing the U.S. tax code to encourage family ownership of media companies
b) using excise taxes on other products to subsidize media companies
c) transferring ownership from for-profit businesses to nonprofit foundations
d) promoting university-based journalism centers as news producers
16) Skeptics fear that if community foundations took over the operation of local newspapers, the
papers would
a) emphasize favorable publicity for the community instead of hard-hitting news.
b) increase the price for consumers.
c) not allow advertising of goods and services.
d) reduce the scope of their offerings and not cover as much non-local news.
17) The largest example of a successful media cooperative is
a) the Christian Science Monitor.
b) NBC and MSNBC.
c) the Associated Press.
d) Comcast/NBC Universal.
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18) The Associated Press began in 1848 as the Harbor News Association with the primary
responsibility of
a) collecting information from foreign newspapers.
b) meeting transatlantic ships to pick up the mail for New York newspapers.
c) sharing news stories with other New York newspapers.
d) consolidating news coverage with press pools.
19) One of the main financial concerns about nonprofit organizations purchasing newspapers is
that
a) subscription sales would decrease.
b) advertisers would be resistant.
c) the cost of replacing aging printing presses would be more than nonprofits could bear.
d) employees would expect and demand improved and more expensive benefits.
20) Because of its inherent high costs, many newspapers have abandoned _________ reporting.
a) celebrity
b) financial
c) consumer
d) investigative
21) The Medill Innocence Project is probably the most widely-publicized program that relies on
__________ to research and generate news content.
a) seasoned journalists on leave from their employer
b) university students
c) freelance journalists and lawyers
d) retired reporters and editors
22) Family-owned media have increasingly declined in number because
a) fewer heirs are interested in media companies today than in the past.
b) inheritance taxes inhibit bequeathing the family business to heirs.
c) media chains are no longer interested in buying family-owned media.
d) recent changes in the law prevent transfer of ownership within families.
23) One way U.S. government policy historically has NOT favored the print media over other
types of business is
a) special reduced postal rates for printed materials.
b) favorable tax treatment for joint operating agreements between newspapers.
c) government subsidies to help newspapers pay for printing paper.
d) free delivery of weekly newspapers by the postal service.
24) The first reduced U.S. postal rate for the mass media was created in
a) 1789.
b) 1845.
c) 1879.
d) 1903.
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25) Newspaper and magazines now qualify for special second-class postage rates if
a) they contain substantive news content.
b) less than 70% of their content is advertising.
c) they meet strict editorial guidelines.
d) they meet page-size and weight limits and are presorted and bundled in ZIP-code order.
26) Which similarity exists between content and the grassroots reasons for why government has
historically been hands-off when it comes to the media?
a) concerns of censorship
b) control of fees
c) control of advertising
d) limits of laws
27) Joan Kroc of the McDonald’s fortune gave $200 million to
a) Columbia Broadcasting System.
b) National Public Radio.
c) Public Broadcasting System.
d) ProPublica.
28) In terms of public broadcasting, underwriting means
a) paying for a public announcement that is required by law.
b) providing a generous noncash donation.
c) making a contribution that receives on-air acknowledgments from the station.
d) paying a service charge to become a “member of the station.”
29) Historically, the transformation of a technological invention into a mass medium that
successfully reaches a mass audience has largely been the result of
a) trial and error.
b) the clear vision of the inventor.
c) a pre-existing need or specific purpose for the invention.
d) a single massive infusion of cash.
30) The first three phases in the process of turning a new technology into a successful mass
media industry include all the following EXCEPT
a) inspiration—the spark of an idea about a new way to communicate (i.e., a new medium).
b) invention—creating new equipment and/or processes needed to operate a new medium.
c) entrepreneurship—developing a viable way to make money from a new mass medium.
d) industry—imitators arising to compete with the pioneers in the new medium.
31) A group of web designers decides to try to organize and create a new trade union. This
situation represents which phase in the evolution of a mass medium?
a) expansion
b) maturation
c) proliferation
d) stratification
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32) Steve Jobs co-founded
a) Google.
b) Apple Computer.
c) Microsoft.
d) News Corp.
33) An industry dominated by a few companies is called
a) a monopoly.
b) conglomerated.
c) an oligopoly.
d) saturated.
34) The continuing trend in mass media ownership is the
a) consolidation into fewer but bigger companies dominating each industry.
b) break-up of large companies into smaller spinoffs.
c) increasing regulation of media ownership changes by the government.
d) resurgence of family-owned companies.
35) According to Andy Grove, the final stages of an aging industry follow a predictable three-
stage course that occurs in the this order:
a) ignore new challenges, launch radical reforms, and resist change.
b) resist change, ignore new challenges, and launch radical reforms.
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c) ignore new challenges, resist change, and launch radical reforms.
d) resist change, launch radical reforms, and ignore new challenges.
36) The following are all trade groups EXCEPT the
a) Motion Picture Association.
b) Association of American Publishers.
c) Recording Industry Association of America.
d) American Federation of Labor and Congress of Industrial Organizations.
37) Critics concerned about how much influence mass media trade groups seem to exert on
government regulators and the legislative process often point out
a) how ill-prepared the regulators are for doing their jobs.
b) that most media executives earn much larger salaries than the regulators.
c) the Washington turnstile that moves people back and forth between jobs in the media and
government jobs as regulators for those same media.
d) the enormous political power and huge amounts of money that PACs and other special
interest groups use in lobbying for new laws and regulations.
38) Despite concerns about government involvement in the mass media, one of the best
examples of the U.S. government offering direct financial support to mass media is the
a) BBC.
b) Corporation for Public Broadcasting.
c) FRC.
d) Wall Street Journal.
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