Some Economists Think That Advertising Is a Waste of Resources

question 76

Multiple Choice

Some economists think that advertising is a waste of resources because:

• A)rational consumers end up spending too little on brand names.
• B)consumers may buy things they do not need.
• C)advertising creates excess capacity.
• D)advertising leads to lower costs for goods and services.

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Definitions:

Valuation Models

Valuation models are analytical methods used to estimate the current value of an asset or a company based on various economic factors.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after eliminating intercompany transactions and distributions among subsidiaries.

Controlling Interest

Ownership of a sufficient portion of a company's stock to influence or direct the management and operations.

Amortization

The process of spreading out a loan or intangible asset cost over a specific period of time for accounting and tax purposes.