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Economics Multiple choice

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2. Advertising can enhance economics efficiency when it:
A) increases brand loyalty
B) expands sales such that firms achieve substantial economies of scale
c) keeps new firm from entering profitable industries
d) is undertaken by pure competitors

3. We would expect a cartel to achieve
a) both allocative efficiency and productive efficiency
b) allocative efficiency, but not productive efficiency
c) productive efficiency, but not allocative efficiency
d) neither allocative efficiency nor productive efficiency

4. If a firm is hiring variable resources D and F in perfectly competitive input markets, it will minimize the cost of producing any level of output by employing D and F in such amounts that:
a) the price of each input equals its MP

5. At its profit-maximizing output, a pure nondiscriminating monopolist achieves:
a) neither "productive efficiency" nor "allocative efficiency"
b) both "productive efficiency" and "allocative efficiency"
c)"productive efficiency" but not "allocative efficiency"
d) "allocative efficiency" but not "productive efficiency"

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Solution Preview

use process of elimination
A) increases brand loyalty - well if your product is really bad, do you expect people to be loyal even if you advertise a lot?
C) keeps new ...