A positive effect of advertising for society is that it:
A. Increases market share for the dominant firm in the industry
B. Provides useful information to reduce search cost for consumers
C. Raises barriers to entry into the industry and protects existing firms
D. Creates price leadership and gives firms guidance in dealing with rivals
B. Provides useful information to reduce search cost for consumers
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The figure above shows that the deadweight loss from the tariff is
A) $20 million per year. B) $30 million per year. C) $15 million per year. D) $55 million per year. E) zero.
When policy makers decide to devalue the currency, such an action generally represents
A) a decision to let the currency float. B) an increase in the pegged value of the domestic currency. C) a reduction in the foreign price level. D) a reduction in the domestic price level. E) none of the above
Refer to Scenario 7.1 below to answer the question(s) that follow. SCENARIO 7.1: You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. Refer to Scenario 7.1. During the year your economic costs were
A. $40,000. B. $60,000. C. $100,000. D. $130,000.
Refer to the table. Which of the following might reduce the per capita income gap between countries A and E?
A. Faster population growth in country A than in country E.
B. Greater investment relative to GDP in country E than in country A.
C. More rapid improvement in literacy and education in country A than in country E.
D. Increased capital flight from country A relative to that from country E.