If advertising reduces a consumer's price sensitivity between identical goods, it is likely to
a. increase the elasticity of demand for differentiated products.
b. enhance competition and encourage more product diversity.
c. reduce competition and reduce social welfare.
d. encourage the consumption of all homogenous goods.
c
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Which of the following is NOT an example of a transaction cost?
A) the enjoyment of owning the good B) the opportunity cost of time spent looking for stores that sold the good desired C) the cost of returning a defective product D) time spent bargaining over the price of a good
Determining the price of compact discs is a concern of:
a. macroeconomics. b. microeconomics. c. both macroeconomics and microeconomics. d. neither macroeconomics nor microeconomics.
In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called
a. spending. b. revenue. c. income. d. wages, rent, and profit.
In the data, we observe that countries with high inflation rates tend to have high nominal interest rates. What does this imply, if anything, about real interest rates in countries with very high inflation rates?
What will be an ideal response?