When you buy a new car, the dealer presents you with a set of keys and you drive away into the sunset. What would you do if, after agreeing to a price for the car, the dealer told you that a set of keys would cost an additional $5? What does this tell you about the price elasticity of demand for car keys? Explain
To avoid going to another dealer and incurring additional search and bargaining costs, you would probably
buy the keys, because they are a linked good to the car purchase. This tells you that the demand for car keys
is relatively inelastic.
Economics
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In the income-expenditure model, firms stand ready to provide all the output that is demanded
Indicate whether the statement is true or false
Economics
Marge would like her husband Homer to drink less beer. All of the following are ways she could encourage Homer to drink less beer except
A) pay him to drink less beer. B) convince him that beer is good for his health. C) refuse to cook dinner for him if he does not cut back on his beer drinking. D) make him pay her $10 for every beer he drinks.
Economics