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Angel and Mboma are discussing an economic model explaining consumers' responses to tobacco products. Mr. Cheung,...

Angel and Mboma are discussing an economic model explaining consumers' responses to tobacco products. Mr. Cheung, a senior engineer, question whether the model describes the reality exactly. What shall Angel and Mboma respond to Mr. Cheung's question? Explain!

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Answer #1

Angel and Mboma should respond by stating "consumer choice theory". Consumer choice theory is an economic model that helps in understanding the preferences and buying patterns of consumers based on their income and other external/internal factors.

Consumer choice theory also helps in identifying the pattern of consumer spending. And so with the help of this model we can be sure that results describe the reality exactly.

How consumer react to tobacco products is based on its effects on health. If tobacco products causes bad effects on the health and consumers are educated about these effects the they will buy less tobacco products. And if consumer become addict to tobacco products then they may continue buying tobacco products.

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