Chapter 3, Problem 4AA

To determine

The best term which completes the sentence with correct meaning.

Answer to Problem 4AA

Option (c) − Principles

Explanation of Solution

When it comes to making a decision for spending money, the consumer should follow some basic principles or rules before buying the product. There are few mentioned below:

• A consumer should focus primarily on his budget or income when he wants to purchase a commodity.
• He should also get prior information about the product’s quality, its price, price of related goods, etc so that the decision he makes of purchasing the product or not should be rational.

Other options in the question are not suitable as the answer because the question talks about the rules which a consumer should follow. No other option except ‘principles’ make sense with the question asked.

Economics Concept Introduction

Introduction:

Rational behavior of a consumer is something which helps the consumer in taking the right decision to purchase a commodity. A consumer is rational when he looks at various factors as price of the commodity, his income, his taste and preferences and majorly his satisfaction from the money he spends to buy a particular commodity.