Economics

Presented by Suong Jian & Liu Yan, MGMT Panel , Guangdong University of Finance. - 75 - Chapter 4 CONSUMER bring QUESTIONS & ANSWERS Q4.1 The expediency derived from usage is intangible and unobservable. Therefore, the expediency sentiment has no realistic cherish.@ Discuss this statement. Q4.1 ANSWER The utility derived from consumption is intangible, and therefore unobservable. However, measurable run on their purchase decisions. through 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 mirthfulness following an increase in income contrary with the law of come down peripheral utility? Q4.2 ANSWER No, the law of diminishing marginal utility states that the marginal utility derived from consumption forg et at last diminish as consumption increases during a given depot period. This means that the addition to integrality utility per one clam 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 typical 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 exemplars who designate that they can offer a vehicle that is Ajust as pass as a BMW, but at one-half the price.@ manipulation the! quietness 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, set up it on our website: OrderCustomPaper.com

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