Use the following statements to answer this question
I. To maximize profit, a firm will increase its advertising expenditures until the last dollar of advertising generates an additional dollar of revenue.
II. The full marginal cost of advertising is the sum of the dollar spent directly on advertising and the marginal production cost that results form the increased sales that advertising brings about.
A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.
C
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Does inherited wealth make the distribution of income less equal or more equal?
What will be an ideal response?
Politicians have an incentive to favor short-run policies because _____
a. because voters suffer from myopia b. of special interests c. they may be voted out of office before long-run policies bear fruit d. of rational ignorance
Refer to the above graph. At output level H, the area:
A. 0CGH represents the firm's variable cost of production. B. 0CGH represents the firm's fixed costs of production. C. ACGE represents the firm's economic profit. D. 0AEH represents the firm's economic profit.
The real business cycle theory
A. indicates that supply side shocks cause most business cycles. B. indicates that frequent fiscal policy actions cause most business cycles. C. indicates that demand side shocks cause most business cycles. D. indicates that unanticipated changes in the money supply cause most business cycles.