An example of psychological pricing is:
A company sells a product for $6.99 rather than $7.00.
This pricing strategy plays on the perception that $6.99 feels significantly cheaper than $7.00, even though the difference is only one cent.
Which is an example of psychological pricing?(1 point)
Responses
A company offers 40% off with a $60 or more purchase.
A company offers 40% off with a $60 or more purchase.
A company sells a product for $6.99 rather than $7.00.
A company sells a product for $6.99 rather than $7.00.
A business places billboard ads in a heavily populated area of town, hoping to attract more consumers.
A business places billboard ads in a heavily populated area of town, hoping to attract more consumers.
A business sells a new product at a lower price initially, but raises prices once product has loyal customers.
A business sells a new product at a lower price initially, but raises prices once product has loyal customers.
9 answers
Which of the following is an advantage of competition in the economy?(1 point)
Responses
higher prices
higher prices
fewer choices
fewer choices
lower quality goods
lower quality goods
increased innovation
Responses
higher prices
higher prices
fewer choices
fewer choices
lower quality goods
lower quality goods
increased innovation
An advantage of competition in the economy is:
increased innovation.
Competition encourages businesses to innovate and improve their products and services to attract customers.
Which of the following is a negative externality that can occur when a company builds a new offshore oil platform?(1 point)
Responses
water pollution
water pollution
increased supply of oil
increased supply of oil
new jobs
new jobs
lower oil prices
Responses
water pollution
water pollution
increased supply of oil
increased supply of oil
new jobs
new jobs
lower oil prices
A negative externality that can occur when a company builds a new offshore oil platform is:
water pollution.
The construction and operation of oil platforms can lead to environmental damage, including pollution in the surrounding water, which affects marine life and local communities.
Explain why imperfect information in the economy is detrimental.(1 point)
Responses
With imperfect information, the price the good is sold for is lower than the equilibrium price since the seller has more knowledge than the buyer, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is lower than the equilibrium price since the seller has more knowledge than the buyer, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is higher than the equilibrium price since the buyer has more knowledge than the seller, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is higher than the equilibrium price since the buyer has more knowledge than the seller, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is the equilibrium price since both parties have the same information, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is the equilibrium price since both parties have the same information, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is either higher or lower than the equilibrium price, depending on which party has the imperfect information, leading to inefficiencies in buying and selling.
Responses
With imperfect information, the price the good is sold for is lower than the equilibrium price since the seller has more knowledge than the buyer, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is lower than the equilibrium price since the seller has more knowledge than the buyer, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is higher than the equilibrium price since the buyer has more knowledge than the seller, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is higher than the equilibrium price since the buyer has more knowledge than the seller, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is the equilibrium price since both parties have the same information, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is the equilibrium price since both parties have the same information, leading to inefficiencies in buying and selling.
With imperfect information, the price the good is sold for is either higher or lower than the equilibrium price, depending on which party has the imperfect information, leading to inefficiencies in buying and selling.
The correct explanation of why imperfect information in the economy is detrimental is:
With imperfect information, the price the good is sold for is either higher or lower than the equilibrium price, depending on which party has the imperfect information, leading to inefficiencies in buying and selling.
Imperfect information can cause buyers or sellers to make suboptimal decisions, which can result in market distortions and inefficiencies in resource allocation.
Which economic problem do lemon laws try to correct and/or avoid?(1 point)
Responses
lack of competition
lack of competition
imperfect information
imperfect information
lack of resource mobility
lack of resource mobility
monopolies
Responses
lack of competition
lack of competition
imperfect information
imperfect information
lack of resource mobility
lack of resource mobility
monopolies
Lemon laws try to correct and/or avoid:
imperfect information.
These laws are designed to protect consumers from purchasing defective vehicles (often referred to as "lemons") by requiring sellers to disclose information about the vehicle's quality and providing consumers with recourse if the vehicle turns out to be problematic. This helps to address the knowledge gap between buyers and sellers.
1 answer