When attorneys, accountants and other professionals wear expensive clothing, it:
A. does not serve as a credible signal of ability because anyone can wear nice clothes.
B. can serve as a credible signal of ability.
C. is a waste of money because professionals do not need to signal their ability.
D. only serves as a useful signal of ability if they already have well-established reputations.
Answer: B
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A) a noncooperative game. B) a cooperative game. C) a constant sum game. D) a competitive game. E) both B and C
Manufacturers of Weightbegone are concerned that genetic advances in weight control might reduce the demand for their diet snacks. This is an example of
a. firm-specific risk, which will likely raise shareholders' demand for higher return. b. firm-specific risk, which will likely not likely raise shareholders' demand for higher return. c. market risk, which will likely raise shareholders' demand for higher return. d. market risk, which will likely not raise shareholders' demand for higher return.