Some stores give “free” products to consumer. An economist would say the products are not free. Why the difference?
Please provide the best answer for the statement.
The products may be given free to the consumers for marketing purposes, such as to attract customers to the store. The products, however, are not free to the store. Scarce resources had to be used to produce the “free” products and those resources had to be paid for by the store. Ultimately, whenever a product (food, brochure, toy) is given away free by a business to a consumer, the business still had to pay for the product because scarce resources were required to produce it.
You might also like to view...
The cash that is counted as part of M1 does not include vault cash
a. True b. False
If the price of inputs rises and consumer expectations about future economic activity worsens:
a. Aggregate demand rises, and aggregate supply falls. b. Aggregate demand rises, but aggregate supply does not change. c. Aggregate demand and aggregate supply fall. d. Aggregate demand falls, and aggregate supply rises. e. Aggregate demand and aggregate supply rise.
Deflation
a. increases incomes and enhances the ability of debtors to pay off their debts. b. increases incomes and reduces the ability of debtors to pay off their debts. c. decreases incomes and enhances the ability of debtors to pay off their debts. d. decreases incomes and reduces the ability of debtors to pay off their debts.
Autonomous consumption is the level of consumption that is
A. observed at the poverty line. B. available to someone earning the minimum wage. C. independent of real income. D. consistent with the average standard of living.