Products Are Classified as Being Business or Consumer Products According

question 255

Multiple Choice

Products are classified as being business or consumer products according to the

• A) number of buyers involved in the decision.
• B) buyer's intended use of the product.
• C) seller's intended use of the product.
• D) location of use.
• E) types of outlets from which they are purchased.

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Definitions:

Autonomous Consumption

The level of consumption spending that occurs when income is zero, reflecting expenditures that consumers must make even when they have no income.

Permanent Income Hypothesis

Formulated by Milton Friedman, it states that the strongest influence on consumption is one’s estimated lifetime income.

Paradox of Thrift

An economic theory suggesting that while saving is beneficial to an individual, increased savings by the entire population can lead to a decrease in aggregate demand, ultimately reducing savings at a macroeconomic level.

Theory of the Leisure Class

A socio-economic theory presented by Thorstein Veblen, which critiques consumerism and status-driven consumption, emphasizing the social uses of wealth and leisure to display status rather than for utility.