Economics Today 18th Edition by Roger LeRoy Miller

تمرين 2

Generating Utility for Parents by Offering Apps for Kids
Chris Bergman has just launched a digital app for kids. The app, which Bergman calls Choremaster, is designed to appear as a game to a child. The app awards the child points for completing each task in a series of chores in an effort to "win" the game.
Of course, Bergman knows that the customers for his app actually are the kids' parents. This is why his app is designed to please parents-to generate utility for them as well as for their children. The app gives a child's parent the ability to create a list of chores. In addition, it assists the parent in choosing age-appropriate tasks. To save the parent the trouble of reminding the child to get busy on the next unfinished task, the app performs this function automatically by prompting the child to move on to another chore to "earn more points."
Bergman's Choremaster app is sold alongside a growing array of other educational digital products intended to teach children new concepts, remind kids to do their chores, and simply keep them occupied and quiet for a while. The parents who buy kids' apps such as Choremaster, Sago Mini Doodlecast, Uncolor, and Wheels on the Bus combine them with other purchases as part of consumer optimum. At this optimum, the next kid's app purchased yields additional utility per dollar spent that is equalized with the additional utility per dollar spent on other items. The result across all parents and schools-teachers are using these products, too-is $8 billion of purchases of such products each year.
Why have recent drops in prices of kids' apps generated both realincome and substitution effects for the children's parents?