When a good is price inelastic, consumer expenditures on the good
A) increase when price increases.
B) decrease when price increases.
C) do not change when price increases.
D) are not related to price elasticity of demand.
A
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A metal-stamping factory moves next to a day care center. Noise from the factory makes it impossible for the kids to nap. What would be the optimal solution to this problem?
a. The factory should move. b. The day care center should move. c. The factory should install sound insulation. d. The day care center should install sound insulation. e. We cannot determine the solution without more information.
Consumer surplus is
A. the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay. B. the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. C. the total difference between the total amount that consumers actually pay for an item and the total amount that they would have been willing to pay. D. the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.