Advertising ________ have the potential to mislead ________ buyers about the characteristics of experience goods.
A) does; first-time
B) does not; first-time
C) does; repeat
D) does not; greenwashed
A) does; first-time
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Internal economies of scale means that
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market. C) consumers will have less choices once trade begins, because firms will be squeezed out of the market. D) simply expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.
What is a long-run supply curve?
What will be an ideal response?
Intraindustry trade is characterized by what two features of the industry and market?
A) Diseconomies of scale and homogeneous products B) Non-tariff barriers and large-scale foreign investment C) Quota auctions and low effective rates of protection D) Economies of scale and differentiated products
A farmer notices that a neighboring rancher's cattle are wandering and destroying some of his crops. The farmer decides to offer a payment to the rancher if the rancher will reduce the size of his herd. By doing so, the farmer
A. indicates to the rancher that there is an opportunity cost to the wandering of the cattle, and thereby internalizes the externality. B. can be sure that the size of the herd will be reduced and the size of his own harvest will be increased. C. inadvertently bears the costs of the externality when the rancher should be liable for the costs. D. informs the rancher that the cattle have destroyed crops, which should induce the farmer to build a fence in order to maintain good relations.