Suppose that Melinda goes to the movies 6 times per month when the price is $14 and 4 times per month when the price is $20. What is the price elasticity of Melinda’s demand curve?
a. 0.02
b. 0.2
c. 1.33
d. 10.0
c. 1.33
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Behavioral economists:
A. rely primarily on data drawn from the real world. B. rely primarily on experimental data. C. often arrive at unreasonable conclusions about consumer welfare. D. avoid mathematical models of behavior, as they do not adequately describe real world actions.
If the cross-price elasticity of two goods is positive, then the two goods are
a. substitutes. b. complements. c. normal goods. d. inferior goods.
Tomato sauce and spaghetti noodles are complementary goods. A decrease in the price of tomatoes will
a. increase consumer surplus in the market for tomato sauce and decrease producer surplus in the market for spaghetti noodles. b. increase consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles. c. decrease consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles. d. decrease consumer surplus in the market for tomato sauce and decrease producer surplus in the market for spaghetti noodles.
Which of the following statements best reflects the law of diminishing marginal utility?
A. "I have to have a scoop of ice cream on my pie." B. "I'll never get tired of your cooking." C. "The last bite tastes just as good as the first." D. "I couldn't eat another doughnut if you paid me." E. "I prefer to eat several small meals a day, rather than three large ones."