For each of the following situations, decide whether advertising is directly informative about the product or simply

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For each of the following situations, decide whether advertising is directly informative about the product or simply an indirect signal of its quality. Explain your reasoning.
a. Football great Peyton Manning drives a Buick in a TV commercial and claims that he prefers it to any other car.
b. A newspaper ad states, "For sale: 1999 Honda Civic, 160,000 miles, new transmission."
c. McDonald's spends millions of dollars on an advertising campaign that proclaims: "I'm lovin' it."
d. Subway advertises one of its sandwiches by claiming that it contains 6 grams of fat and fewer than 300 calories.
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Microeconomics

ISBN: 978-1429283434

3rd edition

Authors: Paul Krugman, Robin Wells

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