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Karl Marx and David Ricardo- value depends on the amount of resources used
Adam Smith (1760s) – ‘ How is it that Water which is so essential to human life, and thus has such a high ‘ value-in-use ’ , has such a low market value? And how is that diamonds which are relatively so trivial have such a high market value? ’
The Equi-marginal Utility Principle - the optimum combination of goods consumed - consumer will get the highest utility from a given level of income when the utility from the last re.1 spent on each good is the same.
Price effect = Substitution effect + Income Effect
Income effect of a price change
Substitution effect of a price change
Compensating variation – excludes the change in real income
Giffen goods - accounting for large proportion of consumer expenditure which leads to significant effect on the real income resulting in abnormal income effect outweighing normal substitution effect
Buy one large pizza, get one large pizza free (limit one free pizza per customer)
Exercise While at a discount shoe store, a customer asked a clerk, “I see that your shoes are ‘buy one, get one free- limit one free pair per customer: will you sell me one pair for half-price?” The clerk answered, “I can’t do that,” when the customer started to leave the store, the clerk hastily offered, “however, I am authorized to give you a 40% discount on any pair in the store.” Assuming the consumer has Rs.2000/- to spend on shoes (x) or all other goods (y), and that shoes cost Rs.1000/-per pair, answer the following questions:
Mobile operators to launch interactive FM radio services Thomas K Thomas
Visuals and song related details among services being offered
New Delhi , July 23
Now you can watch visuals while you listen to FM radio on your mobile handset. Mobile operators including Airtel and Hutch are all set to launch a new service called `Visual Radio' which will enable users to get visuals, information and details related to the song and the singer while listening to the radio. The service will also enable users to download the song as ring tone and interact live through quizzes and audience polls.
While Airtel is ready to launch this service by the end of the month, Hutch is announcing the launch this week. The subscribers do not have to pay any subscription fee for the service for now but once the introductory offer period is over the operators may fix a monthly fee. However, users will have to pay in case they download the song or participate in the interactive services. Both the operators have tied up with Radio Mirchi, Hewlett Packard and Nokia for the service.
Visual Radio offers immediate access to factual content related to the songs playing, the group or the singer playing, their background details, history, related quizzes, participation in audience polls and even the facility to download ring tones and wallpaper related to the song. Mobile users can also buy the tickets for concerts or movies from which the song is being played.
"Images and texts are synchronised with the radio broadcast to bring information and interactivity directly to the mobile phone. Research indicates that people listen to 63 minutes of radio on an average day. Can you imagine enhancing their daily experience multiple-fold through the visual medium? That is exactly what we are doing for our Airtel customers. This service is a great example of technologies converging on the mobile and this means that Airtel customers can view related information and other exciting entertainment while listening to their favourite songs," said Mr Sanjay Kapoor, Joint President Mobility, Bharti Airtel Ltd.