Question

Determine whether each statement is true (V) or false ( x ). N.B a statement ought to be correct in its entirety

1-The difference between a "need" and a "want" is that "wants" are "things that their absence impact one's welfare negatively; a "need", on the other hand, are things such as: gold coins, fancy cars....etc. Economists deal with: "effective demand" which includes:" willingness" and" ability-to-pay" ( ).

2- "Price", in the marginal economic analysis, has dual-role. It is "cost" incurred by consumers to enjoy the utility/satisfaction of consumption; and, a "return" to producers/suppliers to reward their labor'( ).

3- The opportunity-cost of paying S.R 250 to purchase a Paris St. German T-shirt is the utility/benefit forgone from spending the same amount on other good(s) / service(s). ( ).

4- The "Diminishing Marginal Product Theory" assumes consecutively-added units of the variable factor-input in the short-run, are "homogenous"; that is, the observed phenomenon is "behavior-related” not "inherent”( )

5-Suppose flights by Saudia and Air France on sector: Jeddah-Paris are seen by voyageurs as "substitutes". Furthermore, assume Saudia operates larger pay-load aircrafts; then, the duopoly / dominant firm market model is appropriate to predict potential interdependent pricing strategies ( ).

Answer 1

1. False

Want -- have a desire to possess or do (something); wish for. Need -- require (something) because it is extremely important or very important rather than just desirable. such as food, water, and shelter.

2- ( True ) Companie use marginal analysis as a decision-making tool to help them maximize their potential profits. And maximise the utility and satisfaction

if a company is considering increasing the volume of goods that they produce, they will perform a marginal analysis to ensure the cost of producing more products outweighs the added expenses that will accompany that decision, such as an increase in labor costs .