Answer the Following Questions

question 75

Essay

Answer the following questions.
a. Li's marginal rate of substitution of hamburger for steak is 1/4, and Zhang's marginal rate of substitution of hamburger for steak is 2. Is the allocation of hamburger and steak Pareto-efficient between Li and Zhang? If not, explain how Li and Zhang could be made better off.
b. Ying and Fei's marginal rate of substitution of purses for shoes is 2.5. What is the price ratio of purses to shoes?

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Definitions:

Consumer Touchpoints

A marketer’s product, service, or brand points of contact with a consumer from start to finish in the purchase decision process.

Purchase Decision Process

The stages consumers go through before, during, and after making a purchase, including recognition of needs, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.

Consumer Purchase Decision Process

The sequence of steps consumers go through, from recognizing a need or want to the post-purchase evaluation.

Situational Influences

External factors that can affect consumer behavior and decision-making processes at specific moments in time.