ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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goods
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producer
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service
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consumer
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Detailed explanation-1: -A haircut is a service. When you purchase a haircut, it’s not something you can hold, give to another person, or resell. “Pure” services are offerings that don’t have any tangible characteristics associated with them. Skydiving is an example of a pure service.
Detailed explanation-2: -Paying afterward is more convenient (and may help barbers to make more money, since some customers may get an extra service on impulse).
Detailed explanation-3: -A haircut is the difference between the initial market value of an asset and the purchase price paid for that asset at the start of a repo. An initial margin is analogous in function to a haircut.
Detailed explanation-4: -When a bank takes a ‘haircut’, it means it accepts less than what was due in a particular loan account. Example: if a bank was owed Rs 10, 000 by a borrower and it agrees to take back only Rs 8, 000, it takes a 20% haircut. Banks do this for accounts where chances of making a full recovery are bleak.