Mike Visits an Electronics Store Having Seen an Advertisement for a Computer

question 36

True/False

Mike visits an electronics store having seen an advertisement for a computer at a very attractive price.The salesperson shows him the computer willingly and describes the attributes.With a whisper,the salesperson says "I'm not supposed to point this out,'cause the manager would kill me,but even though this computer is cheaper,it's a real dog.No quality.This computer over here,while it costs more,you are looking at much more value for money." Mike is impressed at the forthrightness and the fact that the employee is taking a risk to help him make a good choice He buys the computer.The following week he notices advertisements for the model of computer he has just purchased,at prices between 20% and 30% below the price he paid.The store is in violation of the Business Practices Act of the province where the act took place.

---

Definitions:

Price Increase

A rise in the cost of goods or services over time, affecting the purchasing power of money.

Money Income

The total amount of monetary earnings or receipts accrued by an individual or household in a given time period.

Market Demand Curve

A graphical representation showing the quantity of a good that all consumers in a market are willing to buy at each price level.

Income Effect

The change in an individual's consumption resulting from a change in real income, with shifts in purchasing power influencing spending behaviors.