At one time many economists were suspicious of brand names. They saw them as a barrier to entry with no benefits to consumers. In the 1970s economists began to see a possible benefit of brand names to consumers. They discovered that brand names were a way to:
A. overcome negative externalities.
B. signal quality.
C. overcome the free rider effect.
D. market public goods.
Answer: B
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If the average cost curve is downward sloping, then
a. marginal cost is smaller than average cost. b. the marginal cost curve is also downward sloping. c. there are increasing marginal returns to labor. d. wages and other input prices are falling.
The above table shows the short-run total product schedule for the campus book store. What is the average product (AP) of the 4th employee?
A) 58 books sold B) 14.5 books sold C) 18 books sold D) 13.3 books sold
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. If the market maker bought and sold at the equilibrium price, what is his profit
a. $1 b. $2.5 c. $3 d. $0
Which of the following will not cause consumption, and as a result, aggregate demand, to increase?
a. an optimistic business forecast of future income growth b. a tax cut c. an increase in consumer confidence d. a tax increase