Josh is willing to pay $500 for a set of tire, but he is able to pay $300 at the local tire store. His consumer surplus is
a. $800.
b. $300.
c. $200.
d. $500.
c
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Answer the following statements true (T) or false (F)
1) Generally, the goal of false advertising is to increase a firm's sales and profit. 2) Advertising can easily misinform buyers about the characteristics of an inspection good. 3) Unlike experience goods, the potential to lose repeat sales is not necessarily a deterrent to false advertising a credence good. 4) The impact of truthful advertising on a firm's demand is most relative to firms selling inspection goods rather than credence goods. 5) False advertising is more profitable and more prevalent in communities with a large number of transient consumers.
Assets that a company might not be able to convert to cash quickly but that still have significant value (e.g., factory building, real estate, machinery) are known as
a. liquid assets b. hard assets c. corporate assets d. marketable securities e. none of these
In the traditional Keynesian model, an increase in government spending leads to all of the following EXCEPT
A. higher real GDP. B. an increase in consumption. C. an increase in aggregate demand. D. an increase in the price level.
This Marketing the Connection argues that a key difference between market economies and centrally planned economies, like the former Soviet Union, is that "In market economies, decisions about which investments to make and which technologies to adopt are made by entrepreneurs and managers with their own money on the line. In the Soviet system, these decisions were usually made by salaried bureaucrats trying to fulfill a plan formulated in Moscow." But in large corporations, investment decisions are often made by salaried managers who do not, in fact, have their own money on the line. These managers are spending the money of the firm's shareholders rather than their own money. The investment decisions of salaried managers int he United States tend to be better for the long-term growth of
the economy than were the decisions of salaried bureaucrats in the Soviet Union because: A. Soviet managers feared losing their jobs if they adopted new technologies B. U.S. managers are driven by incentives of higher profits, leading them to adopt new technologies C. U.S. managers face no competition from domestic and foreign firms D. Soviet bureaucrats concentrated on cutting costs as they faced intense competition from home and abroad