A Consumer's Decision to Produce a Service for Himself or Herself

question 17

Multiple Choice

A consumer's decision to produce a service for himself or herself or contract externally for the service depends on a variety of factors. Which of the following is an example of a psychic reward a homeowner might receive if he decides to landscape his own yard instead of hiring a landscape design expert?

• A) Control over the landscaping process and the final results
• B) Feelings of pride and pleasure as he looks at the final results
• C) A high degree of confidence and trust in his own ability to landscape
• D) The skills and knowledge of a landscape artist
• E) Less expensive process than a professional landscaper would offer

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Definitions:

Long-run Equilibrium

Long-run equilibrium occurs in a market when all producers and consumers have fully adjusted to any changes in the market conditions, with no excess supply or demand.

Economic Profits

The variance between total income and total expenses of a business, factoring in both clear and hidden costs.

Constant-cost Industry

An industry where input costs remain unchanged as industry output changes, leading to a flat supply curve.

Industry Supply

The total output of goods or services that producers in an industry are willing and able to sell at different price levels, during a certain time period.