Advertising can be a signal of quality
a. only if consumers are irrationally attracted to products they see advertised.
b. if advertising is freely available to all firms.
c. if the benefit of attracting customers is greater for firms with better products.
d. only if the content of the ads contains credible information about the products.
Answer: c. if the benefit of attracting customers is greater for firms with better products.
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“Correlation” is a measure of how one variable causes another to change.
Answer the following statement true (T) or false (F)
The elderly represent the largest demographic group in poverty
a. True b. False Indicate whether the statement is true or false
Which is true under conditions of pure competition?
A. No single firm can influence the market price by changing its output. B. There are differentiated products. C. The market demand curve is perfectly elastic. D. Firms that cannot make pure or economic profits go bankrupt.
An automatic increase in a wage rate found in some contracts is known as a
A. charge for living amendment. B. cost of labor arrangement. C. change of labor agreement. D. cost of living adjustment.