Suppose that Jane enjoys Diet Coke so much that she consumes one can every day. Although she enjoys gourmet cheese, she consumes it sporadically. If the price of Diet Coke rises, Jane decreases her consumption by only a very small amount. But if the price of gourmet cheese rises, Jane decreases her consumption by a lot. These examples illustrate the importance of
a. the availability of close substitutes in determining the price elasticity of demand.
b. a necessity versus a luxury in determining the price elasticity of demand.
c. the definition of a market in determining the price elasticity of demand.
d. the time horizon in determining the price elasticity of demand.
b
Economics
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In the above figure, moving from producing 50 guitars and 50 ukuleles to producing 25 guitars and 75 ukuleles, the opportunity cost of one ukulele is
A) 25 guitars. B) 75 ukuleles. C) 25 ukuleles. D) 1 guitar.
Economics
If total utility is increasing as more of a good is consumed: a. marginal utility must be decreasing
b. marginal utility must be increasing at an increasing rate. c. marginal utility is positive. d. both (b) and (c) are true.
Economics