According to the signaling theory of advertising, consumers
a. pay little or no attention to which firms advertise and which firms do not advertise.
b. are often more impressed by a firm's willingness to spend money on advertising than they are by the content of the advertisement.
c. are often more impressed by low-cost advertisements than they are by high-cost advertisements.
d. gain little or no information about product quality from advertisements.
b
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That part of disposable income not spent on consumption is:
a. saved. b. invested. c. wasted. d. borrowed.
Which of the following industrial countries experienced a relatively slower growth of real GDP in the latter half of the 1990s?
a. Canada b. United States c. Italy d. France e. Japan
Price discrimination may occur in monopoly.
a. true b. false
If firms in a monopolistically competitive industry are operating with economic losses, over time we would see
A) firms alter their advertising rates until they made at least normal profits. B) some firms exiting the industry, causing the market supply curve to shift to the left, raising price. C) some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right. D) the firms working together to increase price and everyone's profitability.