To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Question

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Answer 1

Question

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.

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Answer 2

Question

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.

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Answer 3

Question

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.

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Answer 4

Question

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.

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Answer 5

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.

Answer 6

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.

Answer 7

Chapter 5, Problem 1AA

To determine

To understand: The points that should be kept in mind while shopping for food, cloth, housing, and car.

Answer 8

Expert Solution & Answer

Explanation of Solution

A wise consumer while purchasing tries to make sure that the person is receiving the maximum utility for the dollar spent. When purchasing food, the consumer can either go to a club warehouse store where one can bring food in large quantities which can be consumed on daily basis at a lower cost compared to the grocery store or if the person is busy than the person can visit convenience store which is open 16 to 24 hours in a day but provide limited selection offer at a higher price. Consumers can also save around 40 percent on groceries if the consumer goes to private-labeled products. When purchasing clothes, a consumer needs to ensure that the money spent on the cloth gives a return which maximizes the utility. It means it should be worth spending on cloth as the value paid should get used to an item in return which implies service flow. It also implies that the cloth should be durable and give satisfaction to the customer for a longer period.

When the consumer is planning to buy a house, the consumer has to decide whether to rent it or buy it. If the consumer is renting a house, as a tenant the consumer needs to sign a lease that describes the term under which the house is rented and act as a long-term agreement. Also, the consumer needs to pay a security deposit before moving to a rented house, as it ensures that in case of rent default, the owner of the house will not make losses as the owner can cover rent through security deposit. While purchasing a house instead of renting it, the consumer needs to understand the mortgage installment plus interest which helps to own property even though the consumer doesn’t have sufficient funds in the present. An individual needs to pay a down payment while booking a house but also needs to pay the closing costs which includes the cost incurred to transfer the ownership of the house in its own name. When purchasing the car an individual needs to decide whether the individual wants to go for a new car or a used car. A new car is expensive but its maintenance cost is low whereas the used car is not expensive but its maintenance cost is high. The consumer needs to incur additional costs while purchasing costs like registration costs. A registration cost is paid to the state as a licensing fee. Other things which should keep in mind while investing in a car is to buy an extended warranty and liability. An extent warranty helps to protect the owner against the cost incurred due to heavy repairs and liability insurance pays for property damage and bodily injury due to accident.