Which of the following statements is correct?
a. The more similar Firm A's product is to Firm B's product, the more likely Firm A is to advertise.
b. Monopolistically competitive firms advertise in order to increase the elasticity of the demand curve they face.
c. According to the signaling theory, the more product information an advertisement contains, the more effective it is.
d. Brand names may help consumers if they provide information about the quality of a product when acquiring such information is difficult.
d
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Points where the aggregate expenditure (AE) curve lie above the 45° line are points where aggregate planned expenditure is
A) greater than real GDP. B) equal to real GDP. C) less than real GDP. D) the inverse of real GDP. E) not related to real GDP.
In the economic way of thinking, traffic congestion is a sign of
A) a surplus of people. B) a surplus of automobiles. C) a shortage of buses. D) a negative externality.
If price is above the equilibrium price, then there will be:
A. excess supply. B. neither excess supply nor excess demand. C. excess demand. D. both excess supply and excess demand.
Suppose that a male police officer earns more than a female administrative assistant, but they both have the same amount of education. The difference in wages:
A. can be attributable to the increased danger of being a police officer. B. must be due to discrimination against women among police departments. C. will disappear once the labor market has reached equilibrium. D. is a violation of anti-discrimination laws.