When a satellite television company gains a subscriber, there is no impact on existing subscribers. That means there is no rivalry in the consumption for their service. This is an example of a
A. purely private good.
B. excludable public good.
C. purely public good.
D. congestible public good.
Answer: B
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Paint and paintbrushes are complements. If the price of paint increases, then
A) the demand for paintbrushes will increase. B) the demand for paintbrushes will decrease. C) the demand for paint will increase. D) the demand for paint will decrease.
The basic activity of a firm is
A) to use inputs to produce outputs of goods and services. B) to compete with other firms that produce similar products. C) to provide jobs for its employees. D) to set the prices of its products as high as possible.
In industrywide advertising, managers have an incentive to ________ and ________ for the advertising.
A) free -ride; not pay B) franchise; pay C) franchise; not pay D) free -ride; pay
Ordinary least squares estimation is subject to heterogeneity bias if _____.
A. the regression model exhibits heteroskedasticty B. the unobserved effect is correlated with the observed explanatory variables C. the regression model includes a lagged dependent variable D. the explanatory variables do not change over time