Joseph Gallo poured two glasses of wine from the same bottle but put a more expensive price tag on one glass than on the other. He let people test both and asked them which they wanted, and most wanted the more expensive glass, not knowing that both had come from the same bottle. This result indicates that firms should:
A. be careful about lowering the price of their product, because consumers may assume that a lower price means lower quality.
B. always raise the price of their product.
C. never lower the price of their product.
D. be careful about raising the price of their product, because the law of demand is always valid.
Answer: A
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Marxism's ultimate goal is for ____________ ____________
Fill in the blank(s) with the appropriate word(s).
Why is persistent unemployment a possibility in the Keynesian model but NOT in the classical model?
A) The Keynesian model assumes that people work for motives other than those of earning an income for themselves and supporting a family. B) The Keynesian model assumes that workers can lose their jobs to foreign competition during economic downturns. C) The Keynesian model assumes that the level of real GDP is inflexible. D) The Keynesian model assumes that nominal wages are inflexible downward.
Total surplus is represented by the area below the
a. demand curve and above the price. b. price and up to the point of equilibrium. c. demand curve and above the supply curve, up to the equilibrium quantity. d. demand curve and above the horizontal axis, up to the equilibrium quantity.
Claudia spends her income on two goods, Blu-ray rentals and chewing gum. She considers both goods to be normal goods. If Claudia's income increases and the prices of the two goods remain constant, she will:
A. rent more Blu-rays and purchase less chewing gum. B. rent more Blu-rays and purchase more chewing gum. C. rent fewer Blu-rays and purchase more chewing gum. D. rent fewer Blu-rays and purchase less chewing gum.