A chewing gum manufacturer adds a jalapeño-flavored bubble gum to its product mix. This is an example of horizontal differentiation.
Answer the following statement true (T) or false (F)
True
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As more people in a country started hoarding grains in fear of a shortage, a shortage actually occurred. This is an example of a(n) ________
A) positive externality B) information cascade C) moral hazard D) adverse selection
A good or service or a resource is rival if
A) it is possible to prevent someone from enjoying its benefits. B) it is not possible to prevent someone from enjoying its benefits. C) its use by one person decreases the quantity available for someone else. D) its use by one person does not decrease the quantity available for someone else.
In a perfectly competitive industry, which of the following is a market signal to resource owners?
A) economic profits B) quality of goods C) the level of exports in the country D) the level of subsidies the industry receives
Consider the following regression model: yi= 
0+ 1xi + ui. If the first four Gauss-Markov assumptions hold true, and the error term contains heteroskedasticity, then _____.
A. Var(ui|xi) = 0
B. Var(ui|xi) = 1
C. Var(ui|xi) = 
i2
D. Var(ui|xi) = 