MGEB02H3 Chapter : Week 3 chapter notes

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lavenderdonkey6

5 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEB02H3

Professor

A.Mazaheri

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Document Summary

N theory of consumer behaviour a description of how consumers allocate their incomes among the purchases of different goods and services to maximize their well-being. N consumer behaviour is best understood in 3 distinct steps: consumer preferences: first step is to find a practical way to describe reasons people might prefer one good over another, budget constraints: of course, consumers also consider prices. These combinations will depend on the prices of various goods. N market basket (or bundle) list with specific quantities of one or more goods. In other words, consumers can compare and rank all possible baskets. Thus, for any 2 market baskets a and b, a consumer will prefer a to b, will prefer b to a, or will be indifferent between the 2. By indifferent it is meant that a person will be equally satisfied with either basket. Note that these preferences ignore costs: transitivity: preferences are transitive.

Related Questions

Chapter 4 is entitled 'The Theory of Individual Behavior', and much of the chapter is devoted to the use of indifference analysis to build a framework for demand theory. Indifference analysis goes to great lengths to explain consumer behavior and how consumers make choices between options available to them. The options they face include budget constraints, different preferences for risk, and a multitude of products and services from which to choose. If one steps back and looks at consumer behavior, it seems to be based upon a premise that is not actually stated in our book. That premise is that consumers behave rationally in their consumption expenditures.

Do you believe consumers do behave rationally? Is so, how do you explain impulse buying, buying as a result of advertising or strong sales pitches, buying for purposes of conspicuous consumption, or buying to simply have something bigger and better than someone else? If consumers do not behave rationally, how can the theory in chapter 4 account for the above behavior? Is the theory still valid? If you think consumers do behave rationally, how can rational thinking explain the above behaviors? How do your thoughts impact, if at all, your opinion of the theory espoused in our text?

coffeelouse766

is the term that describes the actions a person takes in purchasing and using products and services. a) Marketing b) Market Research c) Consumer behaviour d) Consumer management

1. Imagine that a US company asked you to advise it about going global and marketing its products in other countries. It wants you to list and briefly describe three consumer behaviour-related factors on which it should base its decision.

2. Describe two ways in which consumers could differ in their complaining behaviour because of the culture from which they come.

NOTE: Complaining behaviour refers to actions that consumers might take to make their dissatisfaction know when they receive poor service or products and have some negative experience with a company.

apricotdinosaur198

MGEB02H3 Chapter : Week 3 chapter notes

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