JAMB - Economics (2016 - No. 42)

Consumers allocate their resources based on the ______?
Law of diminishing marginal utility
Value in use and value in exchange principle
Law of returns to scale
Diamond and water paradox

Explanation

Value-in-exchange: It is the amount of goods and services which we may obtain in the market in exchange of a particular thing. In other words, it is the price of a particular good which can be sold and bought in the market.

Value-in-use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use

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