3-2-1 Econ Paper

Topics: Consumer theory, Good, Cost Pages: 1 (377 words) Published: February 16, 2013
3 Consumer Issues Last Holiday

Christmas season has really a great impact on the goods in the market. There were bonuses to employees but together with it was the price increase of goods, especially those foods that are served during Noche Buena and Media Noche, because their demand is very high at that time. So the consumers faced three issues last holiday. First, there was a budget constraint since the consumers have a certain amount of money on hand which they desire to spend. This will constraint them from buying goods beyond their budget. For example, they cannot buy a ham which costs P300.00 if they only have a budget of P200.00 for ham. Another is preference, since the consumers have different views on what is necessary for them at the moment. A good illustration is when two consumers are given an option, whether to buy in bulk or per piece. One may choose the former and the other the latter, depending on their preference. Lastly, the substitution effect, since the products’ prices increased, the consumers are forced to buy those that are best substitutes of the goods they want which are a lot cheaper than what they usually buy. All these issues on goods were faced by the consumers.

2 Ways on How You Chose Your Consumer Goods

As a consumer, I am face with the problem of choosing what goods I want to buy. Being a rational consumer, I first do a cost-benefit analysis. If I think that buying a certain product provides a benefit to me that exceed its price, I will consider it a part of my options. Another thing I take into consideration is its quality. Before buying a good, I check if it is of good quality; for non-edible products—whether it’s durable or not, and for edible ones—whether it appeals to my taste or not. If all these are met, I will certainly buy such good.

1 Determinant on the Value of the Goods

We value goods differently. As for me, to determine the value of the goods, I will assess its importance to me as a buyer. If it...
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