On January 2, 1971, all cigarette advertising was banned on U.S. television and radio stations. Assuming that advertising is a prisoner's dilemma, and that if one company advertises, its competitors will also choose to spend money to advertise, did this
ban likely increase or decrease the profits of cigarette companies in 1971? Briefly explain.
What will be an ideal response?
If advertising is a prisoners' dilemma, then a ban on advertising cigarettes on television likely increased the profits of cigarette companies following the advertising ban.
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A steelmaking plant pollutes the air and water so __________
A. the marginal social cost of producing steel exceeds the marginal private cost by the amount of the marginal external cost B. the marginal social cost of producing steel is less than the marginal private cost by the amount of the marginal external cost C. the marginal private cost of producing steel equals the marginal ex-ternal cost plus the marginal social cost D. the marginal private cost of producing steel minus the marginal social cost equals the marginal external cost
The equilibrium wage rate in an industry is found by
A) the intersection of the market demand curve for labor and the marginal revenue product curve of labor. B) the intersection of the firm's demand curve for labor and the firm's supply curve of labor. C) the intersection of the market demand curve for labor and the market supply curve of labor. D) negotiations between the union leadership and the managers of the firms.
At a level of output equal to the economy's potential, the simple spending multiplier in the long run equals one
a. True b. False Indicate whether the statement is true or false
Suppose a monopolist offers a $20 mail-in rebate on an item with a list price of $100. In order for the rebate to be a perfect hurdle, it must be the case that:
A. buyers use the rebate if and only if they have a reservation price between $80 and $100. B. buyers use the rebate if and only if their cost of filling out the rebate is less than $20. C. all buyers with a reservation price greater than $80 use the rebate. D. some buyers with a reservation price greater than $80 use the rebate.