In this assignment you will apply consumer choice theory andmarginal analysis to business problems.
Consider each of the following products and services:
a pair of tickets to a sporting or cultural event that youenjoy
a can of common table salt
a college class
In a two-page essay:
Explain how your own current household budget, tastes andpreferences, and future expectations determine how much of each ofthese products you purchase in a year. Describe the benefits(utility) you get from each product and service.
Suppose the price of the tickets were cut in half. How wouldyour consumption of cultural or sporting goods change? Why?
Suppose your household budget was suddenly doubled because youreceived a 100% raise. How would your consumption of each of thesegoods and services change? Explain your answer in terms of utilityand marginal analysis.
What is the law of diminishing marginal utility? How does thislaw affect the ability of table salt companies to stimulate demandfor their product?
In this assignment you will apply consumer choice theory andmarginal analysis to business problems.
Consider each of the following products and services:
a pair of tickets to a sporting or cultural event that youenjoy
a can of common table salt
a college class
In a two-page essay:
Explain how your own current household budget, tastes andpreferences, and future expectations determine how much of each ofthese products you purchase in a year. Describe the benefits(utility) you get from each product and service.
Suppose the price of the tickets were cut in half. How wouldyour consumption of cultural or sporting goods change? Why?
Suppose your household budget was suddenly doubled because youreceived a 100% raise. How would your consumption of each of thesegoods and services change? Explain your answer in terms of utilityand marginal analysis.
What is the law of diminishing marginal utility? How does thislaw affect the ability of table salt companies to stimulate demandfor their product?
