The FTC Has Held That If an Automobile Is Advertised

question 323

True/False

The FTC has held that if an automobile is advertised to get 35 miles per gallon in highway driving, that must be the average mileage that ordinary drivers will get in ordinary driving, otherwise it is deceptive advertising.

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Definitions:

Deadweight Loss

See efficiency loss.

Marginal Cost

The increase in expenditure incurred from making one more unit of a product or service.

Marginal Benefit

The extra benefit or utility received from the consumption or production of an additional unit of a product or service.

Public Goods

Goods or services that are available for consumption by everyone and where use by one individual does not reduce availability to others.