When Attempting to Explain Why a Consumer Purchases a Ford

question 72

Multiple Choice

When attempting to explain why a consumer purchases a Ford automobile instead of a Honda automobile or a Compaq computer instead of an IBM computer,an economist would assert:

• A)that the consumer is making a decision based on what gives him maximum utility.
• B)that everyone knows Hondas are superior to Fords; the consumer cannot possibly be maximizing his utility.
• C)that everyone knows IBM computers are superior to Compaq computers; the consumer may be maximizing his utility at the margin,but is not maximizing total utility.
• D)that there is no standard explanation for consumer choices because consumers have varied tastes and preferences.
• E)that since rationality is bounded by lack of information,a consumer purchases goods based on convenience than on utility maximization.

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Definitions:

High-Context Culture

Cultures in which communication relies heavily on contextual elements like social norms and roles, with less explicit verbal information needed.

Japanese

Japanese refers to anything related to Japan, its people, language, or culture.

Basic Features

Fundamental or essential attributes, characteristics, or functions of something.

Functions

The roles or activities that an individual, system, or entity is designed or expected to perform.