Chapter 02 – The Economic, Social, and Regulatory Aspects of Advertising
Chapter 02
1. (p. 30) The economic effect of advertising triggers off a chain reaction of hard to predict
economic events.
2. (p. 31) Advertising adds value to a brand by educating customers about new uses for a
product.
Chapter 02 – The Economic, Social, and Regulatory Aspects of Advertising
Essay Questions
21. (p. 32) Explain in brief the effect of advertisements on consumers and businesses.
The question of advertising’s effect on total consumer demand is extremely complex.
Numerous studies show that promotional activity does affect aggregate consumption, but they
Topic: Effect on Consumers and Businesses
22. (p. 33) What does the abundance principle state?
23. (p. 39) Explain the difference between social responsibility and ethics in advertising.
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31. (p. 32) Distinguish between primary demand and selective demand?
32. (p. 33) According to the abundance principle, what two important functions does advertising
perform?
33. (p. 37) Define the term ‘stereotypes’ in advertising.
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