question
price elasticity of demand is useful because it measures _______ responsiveness to change in _____ .
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consumers; price
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horizontal demand curve
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perfect elastic demand or supply
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the price of demand helps determine the effect of price changes on a firms ?
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Revenue
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Elasticity measures
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the responsiveness of decision makers to changes in prices, income, or other variables
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The cross-price i'd demand between milk and soft drinks is likely to be
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positive because the goods are substitutes
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vertical demand curve
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perfectly inelastic
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" more elastic " means
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More responsive
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demand is inelastic only if
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price elasticity has an absolute value less than 1
question
When total utility is falling, marginal utility is
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negative
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If a consumer buys a good, the expected:
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marginal value of the good is greater than or equal to its price
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Which of the following statements concerning utility is correct
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Utility is a subjective measure of satisfaction an individual receives from consuming a good or service
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marginal utility
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additional satisfaction obtained from consuming one additional unit of a good
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total utility
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a sum of all marginal utilities
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law of diminishing marginal utility
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marginal utility falls as more of a good is consumed, other things constant
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which of the following tends to make demand for a good more elastic
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consumers have a long time to adjust to a price change
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Goods with an income elasticity of demand greater than 1 are called
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luxuries
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If a 5 percent increase in price leads to an 8 percent decrease in quantity demanded, demand is
answer
elastic
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If Joe says that nothing comes close to a Pepsi, his demand for Pepsi is likely to be
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relatively price inelastic
question
if people have more time to adjust to a price change, the price elasticity of demand for that food is likely to:
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increase
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if the cross-price elasticity of demand is -3 then
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the goods are complements
question
In order to prove that Coca Cola and 7-Up are substitutes, one should test ______ and get a ____.
answer
cross-price elasticity; positive number
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" i don't feel so good; i shouldn't have that last doughnut." which of the following supports this statement
answer
the marginal utility of the next doughnut will be positive
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if marginal utility is positive, then total utility is
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increasing
question
According to the law of __ the marginal until its received from each additional unit of good sometimes declines, other things constant
answer
Diminishing marginal utility ( extra credit )
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