A firm with a very good product
a. has a higher cost of signaling (advertising) than does a firm with an inferior product.
b. has more to gain by signaling (advertising) than does a firm with an inferior product.
c. does not need to signal (advertise) because the product's quality speaks for itself.
d. will signal (advertise) effectively if signaling is free.
b
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Which of the following statements is true of dynamically complete models?
A. There is scope of adding more lags to the model to better forecast the dependent variable. B. The problem of serial correlation does not exist in dynamically complete models. C. All econometric models are dynamically complete. D. Sequential endogeneity is implied by dynamic completeness..
Exhibit 17-2 Aggregate demand and aggregate supply curves
As shown in Exhibit 17-2, if people behave according to rational expectations theory, an increase in the aggregate demand curve from AD1 to AD2 will cause the price level to move:
A. directly from 100 to 105 and then remain at 105. B. directly from 100 to 110 and then remain at 110. C. from 100 to 105 initially and then eventually move back to 100. D. from 100 to 105 initially and then eventually move to 110.
Did President Obama’s $787 billion fiscal stimulus package of early 2009 work? Name several facts in support of the proposition that it did. Also, list the arguments of the skeptics.
What will be an ideal response?
If Gross Domestic Product (GDP) and other national income accounts are expressed in nominal values, then they are
A. measured in constant prices instead of actual market prices. B. measured in real values. C. readily comparable to Gross Domestic Product (GDP) figures for other years. D. measured in market prices at which goods actually sold.