Advertising

1. At the national level, identify factors that might be expected to influence a country'saggregate level of expenditure on advertising.
2. Explain the distinction between search goods and experience goods. Quote examples of goods that belong in each category.
3. Explain the distinction between convenience goods and shopping goods. What are the implications of this distinction for the likely effectiveness of persuasive advertising?
4. With reference to a quality-signalling model of advertising, explain carefully why the content of the advertising message might be less important than the simple fact that the product is being advertised for consumers who are considering buying the product.
5. 'Evaluation of the welfare effects of advertising is made difficult by the fact thatpersuasiveadvertising changes consumer tastes and preferences'. Explain how Dixitand Norman (1978) avoid this difficulty. What are the main conclusions of their analysis of the social welfare implications of advertising?