Chapter 11 Application Exercise

Ch 11
Application Exercise
1.
100% physical good
New car………mainly a good but usually there is a warranty or two that go with it that would be a service
Designer jeans…..good completely.

100% service
Car oil change….service completely.
Dress dry cleaning……service completely.
Haircut………service.
Tax preparation software…..a tangible good, but ultimately provides you a service.
College education……….a service, no tangible good except maybe a diploma.

2.
Easy to access quality……………………………..................................................difficult to assess
New car, designer jeans, dry cleaning, haircut, tax prep, oil change, college education

3.
It is easier to assess the quality of a good than it is to assess the quality of a service. Since services are intangible it is harder to gauge quality. Some goods are also easier to gauge quality than others.