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4 pages/≈1100 words
5 Sources
Mathematics & Economics
English (U.S.)
MS Word
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Why People Purchase The Things: How Consumers Make Economic Decisions (Coursework Sample)


Students will use the theory of consumer choice and the impact of the concepts of asymmetric information, political economy, and behavior economics, to describe how consumers make economic decisions.
Assignment Steps
Scenario: You have been asked to assist Toyota marketing department to better understand how consumers make economic decisions.
Write a 1,050-word analysis including the following:
The impact the theory of consumer choice has on:
Demand curves
Higher wages
Higher interest rates
The role asymmetric information has in many economic transactions.
The Condorcet Paradox and Arrow's Impossibility Theorem in the political economy.
People are not rational in behavior economics.
Thank you very much for your help.


How Consumers Make Economic Decisions
Institution Affiliation
How Consumers Make Economic Decisions
Several factors influence consumer decisions when it comes to the purchase of certain goods and services. A successful marketer should be able to identify the various reasons why people purchase the things they have at any given time. Understanding these factors helps the marketer to identify the most efficient way to convince the consumer to purchase the products on sale. In most cases, the financial situations of the consumers are the main determinant in their purchase patterns. If properly analyzed, one will realize that most consumers plan their budgets, according to the priorities they need to consider at any given point. The theory of consumer choice analyzes the spending patterns of consumers and the reason behind their decisions. The theory provides a comprehensive study of the processes involved to select, purchase, use and their experiences while using the products. The theory of consumer choice affects the demand curves, higher wages, higher interest rates and the role of information in economic transactions.
In any economy, the higher the prices, the lower the demand and vice versa. The demand is, therefore, affected by the income of the consumers. Most consumers have fixed salaries and the only time they get to purchase products without straining is when the prices of the goods are subsidized to fit their budget. The demand for products, therefore, affects the demand for products. In the case of Toyota, the demand curves change depending on the prices placed on different goods. The best way to increase the demand is to reduce the prices of products once in a while to attract consumers. Doing so, especially in set times during the year for instance black Friday deals keep consumers waiting for the reduction in prices. Close observation during this time will reveal an increase in the demand of goods.
Additionally, the theory of consumer choice affects the consumer's decisions when they have higher wages

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