Which of the following is the major means to signal good quality of goods by firms?
A. Both sales and advertisements
B. Sales
C. Warranties/guarantees
D. Advertisements
Answer: C
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Which of the following will result in a decrease in a consumer's purchasing power?
A) A decrease in the consumer's income B) An increase in the price of the good on the vertical axis C) An increase in the price of the good on the horizontal axis D) all of the above
Refer to Figure 4.3. Which diagram most likely represents the indifference map for left shoes and right shoes?
A. A
B. B
C. C
D. D
The production possibilities frontier model shows that
A) if consumers decide to buy more of a product, its price will increase. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. C) economic growth can only be achieved by free market economies. D) if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.
The physical and mental effort people use to produce goods and services is a description of which factor of production?
A) physical capital B) labor C) entrepreneurship D) human capital