Advertising can impede economic efficiency when it:
A. reduces entry barriers.
B. reduces brand loyalty.
C. leads to greater monopoly power.
D. provides consumers with useful information about product quality.
Answer: C
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Refer to the scenario above. The income per capita of Neoland is ________
A) $1,500 B) $1,200 C) $1,000 D) $7,200
If two firms playing Cournot are identical with decreasing average costs, how should the firms divide production to maximize joint profits?
What will be an ideal response?
This graph depicts a tax being imposed, causing demand to shift from D1 to D2. According to the graph shown, the tax caused:
A. an increase in consumption from Q1 to Q2.
B. a decrease in consumption from Q2 to Q1.
C. a decrease in the price consumers pay from P3 to P1.
D. a decrease in the price the suppliers receive from P3 to P1.
Why is trade an important source of economic progress?
a. It allows the trading partners to produce a larger joint output through specialization in the areas where they have a comparative advantage. b. It allows the trading partners to produce a larger joint output as the result of greater realization of cost reductions that accompany the adoption of mass production methods. c. It makes it possible to realize gains from the discovery and dissemination of innovative products and production processes. d. All of the above are correct.