What are the factors that determine a buyer's purchasing decision?
What will be an ideal response?
a) Tastes and Preferences: The amount of benefits that a buyer receives from consuming goods and services is a direct result of his tastes and preferences. Thus, out of a set of all things that a buyer can purchase, he will decide to purchase the good or service that gives him maximum satisfaction, which is a function of his tastes and preferences.
b) Prices of goods and services: Prices of goods and services are the most important determinants of a buyer's purchasing decision. When considering prices, the buyer not only considers the price of the good she is considering for purchase but also the prices of all other available goods.
c) The budget set: The final component of the buyer's problem is the income she has available to spend on goods and services. This is represented by the budget constraint, which shows all possible bundles of goods and services that exactly exhaust her income.
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Individuals who are not working and are not actively looking for work are counted as unemployed if they have looked for work in the past
Indicate whether the statement is true or false
Because the U.S. poverty line is an absolute measure rather than a relative one, the official U.S. poverty rate:
A. fell steadily when there was economic growth that raised the incomes of low-income families. B. fell steadily when there was economic growth that caused inequality to grow among the population. C. increased steadily when there was economic growth that raised the incomes of low-income families. D. increased steadily when there was economic growth that caused inequality to decline across the population.
Inflation makes money an imperfect store of value.
Answer the following statement true (T) or false (F)
Explain the economic assumption that "people are rational."
What will be an ideal response?