Answer the following statements true (T) or false (F)
1) Generally, the goal of false advertising is to increase a firm's sales and profit.
2) Advertising can easily misinform buyers about the characteristics of an inspection good.
3) Unlike experience goods, the potential to lose repeat sales is not necessarily a deterrent to false advertising a credence good.
4) The impact of truthful advertising on a firm's demand is most relative to firms selling inspection goods rather than credence goods.
5) False advertising is more profitable and more prevalent in communities with a large number of transient consumers.
1) TRUE
2) FALSE
3) TRUE
4) FALSE
5) TRUE
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If a good is inferior, its income elasticity will be
A) 0. B) 1.0. C) negative. D) positive.
The current account shows international transactions in goods and services, the capital account shows international transactions involving the flow of financial assets, and the official reserve transactions account shows movement of international reserves
a. True b. False
Which of the following statements best describes the outcome of a change in demand?
a. A change in the demand of a good never causes the demand curve for that good to shift. b. A change in the demand of a good never causes the demand or supply curve for that good to shift. c. A change in the demand of a good never causes the supply curve for that good to shift. d. A change in the demand of a good causes the demand and supply curves for that good to shift.
An employer would never operate on the upward-sloping part of an MRP curve because
A. he or she would not be maximizing profits. B. he or she would be hiring workers at wages above MRP. C. the number of workers is too large to get economies of scale. D. he or she would then have too little capital per worker.