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Consumers allocate their resources based on the ______?

Economics
JAMB 2016

Consumers allocate their resources based on the ______?

  • A. Law of diminishing marginal utility
  • B. Value in use and value in exchange principle
  • C. Law of returns to scale
  • D. Diamond and water paradox
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Correct Answer: Option B
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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