Suppose we advertise up to the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one)
If the full marginal cost of advertising is greater than one, then we will generate: A) less output than the profit maximizing level.
B) more output than the profit maximizing level.
C) the profit maximizing level of output.
D) We don't have enough information to answer this question.
B
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The circular-flow diagram illustrates that:
A) production generates income so that income and production are the same. B) the economy's income is less than its production. C) the economy's income is exceeds its production. D) none of the above are necessarily correct.
Which of the following is an example of an unintended consequence?
a. first time tax credits that cause more home sales b. a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business. c. increased parking fines that lead to fewer violators d. all of the above