lectur6-page15 - Consumers in their self interest strive to...

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15 15 Self Interest Normally implies the maximization of profits or the minimization of losses. u Consumers : strive to maximize the amount of satisfaction possible from spending a given amount of money income. (as little as possible!) Self interest is a powerful force in capitalism. Adam Smith in his 1776 book, Wealth of Nations , referred to self interest as the “invisible hand” that is the guiding force in the market place. Smith alleges that the “invisible hand” guides individuals in pursuit of their own self interest to use resources efficiently. Let us take a look at self interest from a variety of perspectives.
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Unformatted text preview: Consumers, in their self interest, strive to maximize the amount of satisfaction possible from spending a given amount of money income. They want to get the “biggest bang for their buck.” Do you blame them? What do you do? I often here retailers or salespersons grumble about how people today just want something for nothing, this world has gone bonkers. Has it? Or are consumers just acting in their own self interest trying to get the lowest price possible for the commodities they consume?...
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