We may be tempted to determine the optimal level of advertising expenditures at 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)
In general, this rule will not allow the firm to maximize profits because it ignores the: A) price elasticity of demand.
B) marginal cost of additional sales generated by the advertising.
C) advertising-to-sales ratio.
D) fixed costs of advertising.
B
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In order for the existing workforce to be more productive, there needs to be
A. An increase in human capital. B. A decrease in economic growth. C. A redistribution of income within the nation. D. An increase in population.
Because automatic stabilizers exist in the United States economy
A. during a recession, transfer payments automatically rise and tax revenue drops; during a period of economic recovery, transfer payments fall and tax revenue rises. B. real wages automatically adjust to keep the labor force fully employed at all stages of the business cycle. C. monetary policy is designed to automatically respond to changes in money demand. D. during a recession, the government's budget deficit automatically becomes smaller. E. All of the choices/statements are true.
The process of using resources to produce new capital is
A. research and development. B. investment. C. economic growth. D. consumption.
Assume that M is $250 billion and V is 8. If V increases by 15%, what will be the change in nominal GDP?
What will be an ideal response?