New Products Provide a Classic Case of the Consumer Information

question 36

Multiple Choice

New products provide a classic case of the consumer information problem. However, in some cases consumers partially solve the problem by trusting the "brand name" of the producer of the new product. Because firms spend millions of dollars advertising and maintaining their brand names, the likelihood of a "brand name" firm intentionally selling a dangerous or shoddy new product is

• A) high because big firms are always after a quick dollar.
• B) high because their brand name is a communal property right.
• C) low because big firms do not make mistakes.
• D) low because the firm with a brand name has a lot to lose if word spreads about bad consumer experiences.

Analyze the impact of tariffs, quotas, and subsidies on international trade and domestic markets.

Identify and evaluate the factors that contribute to a nation's trade balance and its implications on the economy.

Distinguish between absolute and comparative advantage in the context of global trade.

Recognize the role of government policies and interventions in international trade.

---

Definitions:

Elderly

The elderly category refers to individuals typically aged 65 and above, characterized by various biological, psychological, and social changes.

Emotional Arousal

A state of heightened physiological activity and emotional intensity that can enhance memory, perception, and problem-solving skills.

Aggressive Action

Behaviors intended to harm or injure another being, be it physically or psychologically.

Angry Person

An individual who frequently feels or expresses anger, a strong feeling of displeasure or hostility.