Utility analysis deals with
A) the formation of tastes and preferences.
B) the differences of tastes and preferences across individuals.
C) the consumption decisions of people based on utility maximization.
D) how consumers determine the utility they receive from consumption.
Answer: C
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Juicy Couture has been successful in selling women's clothing using an unusual strategy
According to an article in the Wall Street Journal, the key to the firm's strategy is to "limit distribution to maintain the brand's exclusive cachet, even if that means sacrificing sales, a brand-management technique once used only for high-end luxury brands." In 2006, Juicy clothes were sold in only four department stores: Neiman Marcus, Saks, Bloomingdale's, and Nordstrom. In 2006, its sales have more than quadrupled since 2002. Source: Rachel Dodes, "From Track Suits to Fast Track," Wall Street Journal, September 13, 2006. How does limiting the number of stores in which Juicy's products are sold contribute to its success? A) It enables Juicy to price its products at a premium and differentiate them from lower-priced products. B) It helps establish Juicy's products as luxury items favored by the very wealthy. C) By sacrificing sales, the company was able to focus on producing high-quality products. D) Maintaining the exclusivity of a product increases the demand for the product.
An increase in income will cause
A) a reduction in the supply of central bank money. B) a reduction in the demand for currency. C) an increase in the demand for reserves. D) none of the above