Advertising that uses celebrity endorsements is most likely intended to
a. increase elasticity of demand for the advertised product.
b. reduce the ability of markets to allocate resources efficiently.
c. provide a signal of product quality.
d. be useful only for psychological effects.
c
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The long-run average cost curve is U-shaped because of which of the following?
A) decreasing marginal returns as more labor is hired B) constant fixed costs as output is increased C) economies and diseconomies of scale D) increasing marginal returns as more labor is hired E) decreasing average fixed costs as output is increased
When an insurance company specifies certain precautions that an insured person must take it is trying to control for moral hazard.
Answer the following statement true (T) or false (F)
One of the major points of the circular flow diagram is:
a. If GDP rises due to increased production, incomes earned from producing GDP must rise. b. Increasing gross private domestic investment is the best way for a nation to grow. c. Increasing government spending is the best way for a nation to grow. d. The top and bottom flows are proof that most economies should always be in equilibrium. e. None of the above.
An excise tax shifts the supply curve
A. by rotating it counter-clockwise. B. down by the amount of the tax. C. up by the amount of the tax. D. by rotating it clockwise.