The theory of consumer choice is representative of how consumers make decisions but is not intended to be a literal account of the process

Some firms have an incentive to advertise because they sell a

a. homogeneous product and charge a price equal to marginal cost. b. homogeneous product and charge a price above marginal cost. c. differentiated product and charge a price equal to marginal cost. d. differentiated product and charge a price above marginal cost.

In order to understand how the economy works in the short run, we need to

a. study the classical model. b. study a model in which real and nominal variables interact. c. understand that "money is a veil.". d. understand that money is neutral in the short run.