Question

In: Economics

Brainstorm common items that you think consumers pay too much for or that you think are overpriced

 

  • Brainstorm common items that you think consumers pay too much for or that you think are overpriced (i.e. movie theater popcorn, brand name items, souvenirs,, etc.). Now think of something more specific, either something that you or someone who know has purchased. For example, I know someone with a baby who was traveling and purchased a small pouch of baby food for $2.00, when even more baby food could have been purchased in a jar for around $0.50.
  • Write about your example, then use the principles you’ve learned about (like scarcity, opportunity cost, rationality, and marginal analysis) to explain why a person would make the decision to purchase that good.

Solutions

Expert Solution

My example would be the popsicles.

Explanation:

I can usually buy a decent popsicle for 0.4 cents. But people are paying a fortune to buy a Magnum popsicles for $2 to $4.

I do think that people buy it because it is limited. The popsicles are unique and contains a bunch of nuts with vanila coating. This makes it attractive for people. However, they are sold in limited number per batch. Therefore, there is scarcity. There are more people who wish to buy it than availabe supply of it. This is similar to concept of scarcity which says there are unlimited wants but limited supply.

As people purchase more of Magnum popsicles, they give up more of other snacks they can buy due to limited budget. This shows the concept of opportunity cost. The opportunity cost of more Magnum popsicles is the other snacks which were given up.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Identify a product that you think you have paid either too little for or too much...
Identify a product that you think you have paid either too little for or too much for. Identify the pricing strategy you think the company is trying to implement (based on the assigned readings), and then evaluate the effectiveness of the strategy. Use at least two sources to justify your answer. (cannot be an electronic)
Identify a product that you think you have paid either too little for or too much...
Identify a product that you think you have paid either too little for or too much for. Identify the pricing strategy you think the company is trying to implement (based on the assigned reading) and evaluate the effectiveness of the strategy. Use at least two sources to justify your answer. You should also use outside research (at least two sources), evaluate the effectiveness of the strategy, and address the competitors response to the pricing decision.
Do you think that teens are exposed to too much sex in the media? What effect...
Do you think that teens are exposed to too much sex in the media? What effect do you believe this has on their sexual development? PLEASE PROVIDE REFERENCES!!!! Class: Adolescent Psychology (PS221)
Do you think we are expecting too much of healthcare providers to require them to be...
Do you think we are expecting too much of healthcare providers to require them to be good communicators – and also be able to provide good technical quality of care? Why or why not?
1) When a market is missing: consumers' willingness to pay is too low to sustain the...
1)When a market is missing:consumers' willingness to pay is too low to sustain the efficient quantity.the government must create the market artificially.there is the potential for total surplus to increase through the creation of a new market.deadweight loss would increase, but only if more units are exchanged.2)A seller's willingness to sell:is determined by the buyer's willingness to pay.can never be higher than the market price.is determined by the opportunity cost of producing and selling her good.must always be equal to...
Do you think consumers should assume much of the responsibility for promoting their own welfare in...
Do you think consumers should assume much of the responsibility for promoting their own welfare in the insurance market or do you think that government should do more?
Do you think the president has too much power as Commander In Chief? Not enough power?...
Do you think the president has too much power as Commander In Chief? Not enough power? Do you believe the War Powers Act to be constitutional or unconstitutional?
Consumers in Washington pay twice as much for avocado as they do for cherries. However, in...
Consumers in Washington pay twice as much for avocado as they do for cherries. However, in California, avocados and cherries are the same price. What are consumers’ budget lines in these two states? Note: avocados are on the x-axis, cherries are on the y-axis If consumers in both states maximize utility, what will be true about the MRS of cherries for avocados? + MRS will be greater in Washington + MRS will be greater in California + MRS will be...
Do you consume too much fat in your diet? Perhaps, not enough? What do you think?...
Do you consume too much fat in your diet? Perhaps, not enough? What do you think? What types of fat do you consume the most? What kind of ailments are tied to fat consumption? Do you know anyone with heart issues? How do they eat? Is there a relationship there?
Class, let’s brainstorm here. Can you think of one solid internal control and also think of...
Class, let’s brainstorm here. Can you think of one solid internal control and also think of a way that a crafty employee might be able to work around this control?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT