The above figure shows a consumer's indifference curves for soda and all other goods. Assuming a budget of $100, derive the consumer's demand for soda for prices of $4 and $10 per case of soda. Estimate the price elasticity of demand for soda
What will be an ideal response?
At a price of $4, 15 cases are purchased, At a price of $10, 6 cases are purchased. In both cases, the same total amount, $60, is spent on soda. This implies unit elasticity.
Economics
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As a consequence of the problem of scarcity:
A. There is never enough of anything B. Individuals have to make choices from among alternatives C. Only some people can "have it all" D. Things which are plentiful have relatively high prices
Economics
Which economic principle accounts for the fact that all-you-can-eat buffet restaurants can be profitable?
A) the law of demand B) the principle of diminishing marginal utility C) the principle of comparative advantage D) the law of supply
Economics