Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In a famous article on advertising, Gary Becker and Kevin Murphy wrote about advertisements that run during television programs: One can say either that advertising

In a famous article on advertising, Gary Becker and Kevin Murphy wrote about advertisements that run during television programs: "One can say either that advertising pays for the programming - the usual interpretation or that programming compensates for the advertising, which is our preferred interpretation." Viewing ads during a television program (or hearing them during a radio broadcast) makes consumers worse off, so they must be compensated (with programming) for having experienced the ads. On the other hand, print ads in newspapers and magazines can be avoided by consumers, so these ads must make consumers better off; otherwise, no one would ever read them. Use this theory to answer the following questions:
a. Think about the different types of advertisements discussed in the chapter (informative, signaling, part of the product). Which type is more likely to appear on TV? Which type is more likely to appear in a newspaper or magazine?
Newspapers and magazines will have about the same amount of informative advertisements as TV.
Newspapers and magazines will have more informative advertisements than TV will.
Newspapers and magazines will have less informative advertisements than TV will.
b. Becker and Murphy wrote their article before online streaming became popular. Nowadays, ads on television are avoidable (to a degree), just like ads in a newspaper. What impact do you think this technology has on the types of ads you see on TV? Select all developments consistent with Becker and Murphy's theory.
Television ads could become more frequent.
Television ads could become more informative.
Television ads could become more entertaining.
Television ads could become more embedded in programming by means such as product placement.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Methods For Business

Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam

12th Edition

840062338, 840062346, 9780840062338, 978-0840062345

More Books

Students also viewed these General Management questions

Question

11. What are the requirements for success in each market?

Answered: 1 week ago

Question

Screw

Answered: 1 week ago

Question

Explain about Schema refinement in Database design?

Answered: 1 week ago

Question

Illustrate Concurrent execution of transaction with examples?

Answered: 1 week ago

Question

Divide and rule ?

Answered: 1 week ago