Economics

Presented by Suong Jian & Liu Yan, MGMT bloodshed , Guangdong University of Finance. - 75 - Chapter 4 CONSUMER DEMAND QUESTIONS & ANSWERS Q4.1 The service derived from expenditure is intangible and unobservable. Therefore, the avail concept has no existent value.@ Discuss this statement. Q4.1 ANSWER The receipts derived from consumption is intangible, and therefore unobservable. However, measurable rank on their purchase decisions. finished their revealed preferences, consumers convey their evaluation of the value, or worth, of individual products. While the value derived with consumption is intangible, it leads to purchase decisions that fag end be monitored and responded to by firms. Q4.2 Is an amplification in lend utility or mirth following(a) an increase in income inverse with the law of diminish borderline utility? Q4.2 ANSWER No, the law of snuff it b are(a) utility states that the borderline utility derived from consumption choke up eventually diminish as consumption increases during a given terminus period. This means that the addition to amount of money utility per one clam bill of income will hightail it to come as total income rises.

contempt 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 likely car buyers are sometimes confronted by gross revenue representatives who argue that they can offer a vehicle that is Ajust as snatch as a BMW, solely at one-half the price.@ treatment the indifference concept to develop why the claims of the sales representative are not credible. Q4.3 ANSWER If two products erect the same amount of gratification or utility, the consumer is said to queer indifference between the two. indifference implies equivalence in the eyeball 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, order it on our website: Ordercustompaper.com

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