Economists have found that the price elasticity of demand for water is higher in the summer than in the winter. Why is this likely to be so?
A. Summer is longer than winter, and price elasticity is higher over longer time horizons.
B. People take more vacations in the summer and so use less water at home.
C. Winter water use tends to be for necessities such as cleaning and cooking, and summer water use tends to be for both necessities and non-necessities such as gardening and recreation.
D. Winter is longer than summer, and price elasticity is lower over longer time horizons.
Answer: C
You might also like to view...
The Fed sells a U.S. government security and a bank dealer writes a check for the amount. When the check clears
A) reserves remain unchanged because the decrease of reserves at the dealer's bank is offset by an increase in the reserves at the Fed. B) reserves have fallen by the amount of the reserves times the reserve ratio, and the money supply falls by the difference between the amount of the check and the fall in the reserves. C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed. D) reserves increase by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed.
The final consumer demand for beef in America will shift to the right if
A. the price of cattle decreases. B. the price of chicken increases. C. the price of pork decreases. D. the price of beef decreases.