Economics

Presented by Suong Jian & Liu Yan, MGMT Panel , Guangdong University of Finance. - 75 - Chapter 4 CONSUMER involve QUESTIONS & ANSWERS Q4.1 The expediency derived from usage is intangible and unobservable. Therefore, the expediency image has no realistic prize.@ Discuss this statement. Q4.1 ANSWER The utility derived from consumption is intangible, and therefore unobservable. However, measurable run on their purchase decisions. by 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 felicity following an increase in income contrary with the law of reduce fringy utility? Q4.2 ANSWER No, the law of diminishing marginal utility states that the marginal utility derived from consumption forget finally diminish as consumption increases during a given marches period. This means that the addition to inwardness utility per one long horse 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 common 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 auto buyers are sometimes confronted by gross revenue lessons who repugn that they can offer a vehicle that is Ajust as wisecrack as a BMW, but at one-half th e price.@ treatment the composure concept! to explain why the claims of the sales representative are not credible. Q4.3 ANSWER If two products provide the aforementioned(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, state it on our website: BestEssayCheap.com

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