With asymmetric information firms might be reluctant to improve the quality of their products because
A) it costs them more to produce the better quality product.
B) they are not able to completely capture the benefits of the improvement.
C) consumers do not value the better product.
D) consumers are better informed about the product and value the new product less.
B
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A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.50, price is $4, marginal revenue is $2.50, and marginal cost is $2.50. This firm is operating
A. with a loss. B. at the break-even point. C. with positive profits. D. at a nonoptimal level of output.
Which term refers to the profits that a firm receives from investing in a new technology?
a. Private benefits b. Social benefits c. Private externalities d. Positive externalities
Which of the following is an example of a foreign direct investment?
a. A French company buying some stocks of an American company b. An American company deciding to buy a Japanese firm c. A Chinese investor purchasing bonds issued by the United States government d. An English national deposits money in an American bank
Dollarization of a currency occurs when a country takes all of its own currency out of circulation and replaces it with U.S. dollars.
a. true b. false