You Experiment by Offering Free Warranties for Your Product in Market

question 18

Multiple Choice

You experiment by offering free warranties for your product in market A not in market B.Sales in A rise from 240 units per week to 360 while sales in B rise from 410 to 430.The Difference-in-difference estimate of the effect of the free warranty is:

• A)80 units
• B)100 units
• C)120 units
• D)140 units

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Definitions:

Real GDP

Real Gross Domestic Product, accounting for the effects of inflation, calculating the total value of all goods and services generated by an economy in actual terms.

Stocks and Bonds

Are financial instruments where stocks represent ownership in a company and bonds are debt securities issued by entities to finance operations or projects.

Value Added

The increase in worth of a product or service as a result of a particular process.

Intermediate Product

An intermediate product is a product that might require further processing before it is ready for sale to the final consumer, often used as an input in the production of other goods.