If people generally believe that "you get what you pay for," it is reasonable for them to:
A. make every effort to get complete information about a product before making a purchase to make sure that the purchase is optimal.
B. assume that a cheaper brand is always a better deal than expensive brands.
C. assume that an expensive item is of higher quality, creating the possibility of an upward-sloping demand curve.
D. assume that an expensive item is of higher quality, which eliminates the possibility of an upward-sloping demand curve.
Answer: C
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What, if any, is the impact of the CPI bias on government spending and taxes?
What will be an ideal response?
At an interest rate of 5 percent, the present value of $1,000 to be received three years from today is
A) less than $875. B) between $875 and $925. C) between $925 and $975. D) more than $975.
If we compare income mobility in relative terms, we would measure whether a person's income:
A. is higher than her parents' income. B. places her higher up in the income distribution than her parents' income. C. is higher at the end of her career compared to the beginning. D. rises with age for all people.
Answer the following questions true (T) or false (F)
1. A perfectly competitive firm's marginal revenue curve is downward sloping. 2. Assume that price is greater than average variable cost. If a perfectly competitive firm is producing at an output where price is $114 and the marginal cost is $102, then the firm is probably producing more than its profit-maximizing quantity. 3. Being a price taker, a perfectly competitive firm cannot receive a producer surplus in the short run.