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Practice: I Want My MTV
Use your new knowledge of consumer demand to answer the following questions.
1. Name something you have purchased in the past year. Describe in as much detail as possible how much this good or service increased your utility. (5 points)
Something that I have purchased in the past year that increased my utility would be my tennis racquets. I play tennis every day, therefore I use them every day. These racquets bring me satisfaction because without them I couldn’t do what I love. Tennis is my passion and this product has allowed me to play this fantastic sport which brings me great happiness and satisfaction
2. Does the principle of decreasing marginal utility apply to this good or service? Have you reached the point of noticing the decreasing marginal utility? Explain. (5 points)
In some ways, yes, this principle can apply to this good or service. So, I get a lot of my racquets from Wilson because I am sponsored. So eventually the number of racquets I have starts to pile up. At one point I had about 9 racquets and by then there was a decrease in marginal utility. When I got another shipment of racquets, there wasn’t much need for them because I already had enough racquets, so they just sat around. Therefore, there was a decrease in marginal utility.
3. Describe a situation in which your budget was constrained. How would your purchasing decisions have been affected if you had had a higher budget? (5 points)
One situation where my budget was constrained was when I was customizing a pair of shoes on nikeid.com. There was a pair that I really wanted, but there were just too expensive to spend on a pair of customized shoes. However, if I had a higher budget I would have definitely customized the shoes that I had wanted and bought them. That much money would not have...