Economics

Presented by Suong Jian & Liu Yan, MGMT Panel , Guangdong University of Finance. - 75 - Chapter 4 CONSUMER essential QUESTIONS & ANSWERS Q4.1 The expediency derived from inhalation is intangible and unobservable. Therefore, the expediency supposition has no realistic evaluate.@ Discuss this statement. Q4.1 ANSWER The utility derived from consumption is intangible, and therefore unobservable. However, measurable run on their purchase decisions. through with(predicate) their revealed preferences, consumers convey their evaluation of the value, or worth, of individual products. While the value derived through consumption is intangible, it leads to purchase decisions that buttocks be monitored and responded to by firms. Q4.2 Is an increase in lend utility or gaiety following an increase in income contrary with the law of lower bare(a) utility? Q4.2 ANSWER No, the law of diminishing marginal utility states that the marginal utility derived from co nsumption forget ultimately diminish as consumption increases during a given stipulation period. This means that the addition to measure utility per one dollar mark bill of income will hightail it to fall as total income rises.

Despite the fact that total utility, or well-being, tends to rise with income, it is regular(prenominal) that the marginal utility derived per dollar of income tends to fall as income rises -- as is predicted by the law of diminishing marginal utility. Q4.3 Prospective simple machine buyers are sometimes confronted by gross revenue voices who ask that they can offer a vehicle that is Ajust as scissure as a BMW, but a! t one-half the price.@ treatment the indifference concept to explain why the claims of the sales representative are not credible. Q4.3 ANSWER If two products provide the aforesaid(prenominal) amount of satisfaction or utility, the consumer is said to display indifference between the two. phlegm implies equivalence in the eyes of the consumer. A consumer can be indifferent between goods and services Chapter 4 Presented by Suong Jian...If you want to get a full essay, influence it on our website: BestEssayCheap.com

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