Economic practice questions.

In February 2021 the United Kingdom's Supreme Court held that drivers for a ride-hailing platform were workers rather than self-employed contractors. Which consequence for the platform follows most directly?

• It must publish the rules its dispatch algorithm uses to assign trips
• It must register every driver as a shareholder in the company
• It must charge passengers a fare set by the transport regulator
• It owes the minimum wage and paid holiday for working time

Answer: It owes the minimum wage and paid holiday for working time

Employment status is the lever: once time logged into the app counts as working time, the wage and holiday floors apply and the cost structure of the whole model changes. The ruling touched neither pricing nor algorithmic transparency, which are governed by separate rules.

From April 2021 Apple required apps on its mobile platform to ask a user's permission before tracking them across other companies' apps and websites, and most users declined. Whose revenue was affected most directly?

• Broadband providers that carry the advertising traffic
• Apps funded by advertising that was targeted across apps
• News services that charge readers a monthly subscription
• Contract manufacturers that assemble the handsets themselves

Answer: Apps funded by advertising that was targeted across apps

A permission prompt is a design decision by a platform operator that reprices an entire market: without the cross-app identifier, advertisers can no longer confirm which app produced a sale. It shows that market power in digital economies often works through defaults rather than through prices.

In February 2016 India's telecom regulator prohibited tariffs that price data differently according to the service being accessed, which ended packages offering free access to a selected set of websites. Which economic argument was central to that decision?

• Whoever picks the free services decides which rivals load
• Users of those packages were paying more per gigabyte than others
• The free packages consumed more radio spectrum than ordinary data
• The free packages could not be operated reliably at national scale

Answer: Whoever picks the free services decides which rivals load

The objection was to gatekeeping at the level of price: a start-up outside the free bundle competes against a rival that costs the user nothing to open. Reading the packages as a pure gain in access misses that the access was selective and that a commercial party made the selection.

A small developer sells subscriptions through a mobile app store that keeps 30% of sales, reduced to 15% for developers below an annual revenue threshold. Which effect on that developer's business does the commission most directly have?

• It guarantees the app a higher position in the store's search results
• It transfers ownership of the app's user data to the store operator
• It sets a floor under the price needed to break even
• It prevents the developer from selling the app outside the store

Answer: It sets a floor under the price needed to break even

A commission is a cost of distribution, so it is passed into the price, absorbed in the margin, or avoided by steering users elsewhere, which is exactly why the steering rules are fought over. It changes neither search ranking nor data ownership, both of which sit in separate terms.

Automated teller machines spread rapidly across banks in the United States between the 1970s and the 2000s, yet the number of bank tellers employed did not fall in proportion. Which explanation is consistent with that record?

• Regulators required a minimum number of counter staff in each branch
• The machines were unreliable, so staff were kept on standby for them
• Customers refused to use the machines until well into the 2000s
• Cheaper branches meant more branches, and tellers moved to selling

Answer: Cheaper branches meant more branches, and tellers moved to selling

The machine took over one task, cash handling, which cut the cost of running a branch, so banks opened more branches and moved staff towards sales and advice. Reading the case as 'machines replaced people' misses that the occupation was rebuilt around a different mix of tasks.

El Salvador made bitcoin legal tender in September 2021, obliging businesses with the technical means to accept it alongside the United States dollar. Which economic risk did an accepting shop face?

• Payments could not be received without holding a bank account
• The value received could move sharply before it was converted
• Every transaction had to be approved by the central bank first
• Prices had to be published in bitcoin instead of in dollars

Answer: The value received could move sharply before it was converted

Volatility shifts exchange-rate risk onto the merchant, who prices in dollars but is paid in an asset whose value can move between the sale and the conversion. The remaining options describe requirements the law did not impose, and a wallet in fact works without a bank account.