Two bottles of body wash sit side-by-side in a grocery store: Olay (a brand name) sells for $6.00, while Up and Up (not a brand name) sells for $3.00 . Even defenders of brand names would have to admit that
a. no rational consumer would spend twice as much for Olay as she would for Up and Up.
b. the side-by-side presence of these two body washes conveys no useful information to consumers.
c. Olay has no incentive to maintain the quality of its product just because of the Olay brand name.
d. None of the above is correct.
d
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Gary, Kevin, and Joshua are three individuals who were previously employed but do not have jobs now. Gary lost his job a year ago
Although he would like to have a job, he has given up looking for one as he thinks there are no suitable jobs available for him. Kevin was working as a finance teacher, but quit his job a few months back to become a stock broker. Ever since he quit his job, he is unable to get a new one, although he is actively seeking. Joshua was employed in a steel mill. He lost his job when the labor union in his mill demanded a hike in wages. Classify the three individuals according to their type of unemployment.
Which of the following statements is true?
A. Economic theory does not make unrealistic assumptions. B. Economists should not ignore details while focusing on complex problems. C. Abstraction forms an important part of economic analysis. D. The word theory means same for both economists and laymen.
The change in net benefits that arises from a one-unit change in quantity is the:
A. present value benefits. B. marginal net benefits. C. total net benefits. D. variable benefits.
What is meant by the term "incentives," and why are they important?
What will be an ideal response?