Consumer theory

Consumers only want to buy as much of a product as is useful to them, and producers only want to produce as much as product as consumers will buy. If Corinne decided to buy 20 pairs of galoshes, she would not have space in her dorm to store them, and her friends would think she was weird. However, if she bought 4 pairs…

Answer to question 1: Since the first quarter of 2015, labor productivity and unit labor costs have increased in the manufacturing, business, nonfinancial corporate, and nonfarm business sectors. Generally, the cause for a rise in productivity can be attributed to “changes in technology; capital investment; level of output; utilization of capacity, energy, and materials; the organization of production; managerial skill; and the characteristics and effort of the work force.” [1] In this case,…

What is the law of supply and demand? They are models that explain an interaction between the supply of a source and a demand for that resource. The law of supply and demand describes the availability of a specific manufactured goods, and the demand for that manufactured good has on the price. If there is a lower supply and a higher demand, the price will be high, but the bigger the supply and lesser the demand, the lesser the price will be for the manufactured goods. This is a setting where…

Comments on the Model 1. Authors use the AIDS to derive the expenditure share in good j for individual h, which is given by equation (10); s_j (p,x_h )= α_j+∑_(k=1)^J▒〖γ_jk lnp_k+β_j ln⁡(x_h/(a(p))) 〗 Here a(p) is the cost of the subsistence basket of goods which is independent from nonhomotheticities, that is, it is assumed that a(p) does not vary with the level of income. Though this is a plausible assumption within a country, across countries it is more like to vary given the differences in…

2.4 MPA theories 2.4.1 Yerkes-Dodson law In a nutshell, the Yerkes-Dodson law operates in the following manner: when arousal increases from low to moderate levels in an individual, the individual’s performance quality will be greater. If the arousal levels reach a point that is to high, performance quality decreases. Figure 1: Hebbian’s Version of the Yerkes-Dodson Curve (Dodson & Yerkes 2014) Optimum arousal is an adaptive anxiety which facilitates better performance (Lehmann et al.…

(20%) Consumer utility and behavior are slightly different from each other beginning with the term consumer utility, this term was created by economists to describe the satisfaction or the usefulness a consumer acquires or obtains after using a good or service (Boundless, 2016) If a consumer continues to consume said good or product the level of satisfaction they get from that product starts to reduce or diminish which is known as diminishing marginal utility. It can be said that a consumer…

materials, and work in order to boost up sales and revenues. SSE Airticity is an energy supplier which in general energy is usually price inelastic but in the case of SSE Airticity it is reducing its prices by 10 % because of competition so consumers can consume its services more as Firmus another supplier for energy is in the market and so which means that Airticity energy more elastic as Airticities prices were also high and also that Airticity had another competitor. Also mostly in…

The Cost of Child Care For many parents child care is a must. It can feel like that low paying job is not coving all that it needs to. With child care expenses at a premium, changing work circumstances could benefit both parents and children. Financially there is both a benefit and a down fall, but the overall benefit should be for the children. Scheduling to be home when your family is active can be enjoyable. It can also have an added benefits of getting to know your family and recognizing…

Economies of scale refer to economic efficiencies as an outcome of conducting a process on a mass scale. Scale effects come to picture due to the presence of fixed and variable costs in the production process. In other words, ‘Economies of Scale’ or ‘Increasing Returns to Scale’, is a term used by economists to refer to the situation in which the cost of producing an additional unit of output (i.e., the marginal cost) of a product (i.e. a good or service) declines as the quantum of output (i.e.,…

demand. Comparable, cross price elasticity determines the change in demand of one product with the increase or decrease in price on a different product. Similarly, income elasticity of demand intends to measure the change in demand after a change in consumers’ income. Elasticity is said to be elastic when the change in demand is greater than the change in price. Inversely, a greater change in price than the change in demand is considered inelastic. The following scenarios will allow a further…