A firm that has market power has the ability:
A. to affect the price of its own product.
B. to conduct illegal activities without fear of prosecution.
C. to command consumer to buy any quantity from them.
D. to drive its competition out of the market.
Answer: A
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Opportunity cost can best be defined as
A) the interest cost of financing a business loan at the bank. B) the value of all of the alternatives sacrificed. C) the value of the next-highest-ranked alternative. D) There is no real definition for opportunity cost.
For any given country, the net capital outflows to all other countries equal:
A. net exports to all other countries. B. net capital inflows from all other countries. C. national savings. D. net foreign direct investment to all other countries.
Two bottles of over-the-counter pain reliever sit side-by-side in a grocery store: Advil (a brand name) sells for $5.00, while Feel Better (not a brand name) sells for $2.50 . In a typical day the store sells some of each type of pain reliever, which suggests that
a. no rational consumer would spend twice as much for Advil as he would for Feel Better. b. some consumers must perceive that Advil is a higher quality product. c. Advil has no incentive to maintain the quality of its product just because of the Advil brand name. d. Advil spends money on advertising to reduce competition in the market.
The case against advertising includes the fact that
A. firms spend large sums of money to create artificial differences among products. B. it increases competition by decreasing barriers to entry of new firms into an industry. C. it provides consumers with valuable information about product availability, quality, and price. D. it ensures high quality and efficient production.