Buying A Fantastic Brand Cleaner

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Yahya Bello Extra Credit 2 Page 133 Econ 1020 Professor Leach 1. Consumers who buy fantastic brand cleaner instead of Pathmark premium All-purpose cleaner behavior would be considered as bounded rationality because they tend to make their choices that serve their objectives, but they have limited ability to acquire and process information. Consumers that buy fantastic brand cleaner can also be considered as bounded rationality because they believe in the rule of thumbs that says the higher the price of goods the higher quality of the goods will be. Since the price of Fantastik brand cleaner is higher than that of Pathmark, they apply the rule of thumbs before making a choice between the two brands. 2. Based on my own prior…show more content…
The answer will be B that stays Goods that people buy frequently and can easily be inspected, such as clothing. This was because consumer who followed the assumption of bounded ratio will intend to make a choice that best serve their objectives without making thorough research , they only have limited ability to acquire and process information and they tend to apply the rule of thumb in purchasing any kinds of goods. 4. The rule of thumb that say(the higher the price of an item the higher the quality of the particular item), this rule simply indicates that items tagged with a higher price will be of a good quality compared to those of a lower price that will be considered as a lower quality. • The rule of thumb is more reasonable in a situation where a particular item cost high in the market scale and consumers concluded such item to be of great quality without any full research on the particular item. E.g. A cloth made with original material will tend to be of great quality and that will be tagged with a higher price for consumers to apply the rule of thumb and get such good from the market. • The rule of thumb is not always reasonable in a situation whereby a particular goods will have a lower price but the quality will be of the higher one and such will distract people who always apply the rule of thumb on all the items they purchased from the market. E.g. some candy cost only 0.99 cent and taste better with greater flavor then other expensive candy that taste
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