In Order, What Are the Steps of the Consumer Decision-Making

question 27

Multiple Choice

In order, what are the steps of the consumer decision-making process?

• A)need recognition, alternative aggregation, re-evaluation, purchase decision, postpurchase behaviour
• B)need positioning, stimulus response reactions, evaluation of alternatives, purchase decision, postpurchase behaviour
• C)need positioning, alternative aggregation and divestment, purchase decision, postpurchase evaluation
• D)need recognition, information search, evaluation of alternatives, purchase, and postpurchase evaluation

Explain how shifting assets and resources to higher valued uses contributes to wealth creation.

Understand the composition and calculation of total costs for a business.

Calculate total variable costs based on unit variable costs and production level.

Understand the concept of sunk costs, marginal costs, and their implications for decision-making.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute a cheaper good for a more expensive one.

Income Effect

The alteration in a person's or an economy's earnings and the effect this alteration has on the demand for a product or service.

Price Change

An alteration in the cost of goods or services, which can go up or down, depending on various factors.

Diamond/Water Paradox

An observation in economics illustrating how water, which is essential to life, is cheap, while diamonds, which do not sustain life, are expensive.