Define the economic concept of elasticity
What will be an ideal response?
Elasticity is a measure of how one economic variable responds to changes in another economic variable.
You might also like to view...
Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?
A) a decrease in income B) an increase in the relative price of a soft drink C) a decrease in the relative price of a soft drink D) a decrease in the price of bottled water
If penalties are imposed only on buyers (but not on sellers) of marijuana, the equilibrium price of marijuana ________, and the equilibrium quantity of marijuana sold ________
A) rise; increase B) rise; decrease C) fall; increase D) fall; decrease
Given that the firm wants to sell both the versions, how should it price its products to have the users self-sort themselves profitably?
a. No-name $60; High-end $130 b. No-name $60; High-end $100 c. No-name $40; High-end $100 d. No-name $40; High end $130
If a consumer reallocates his or her spending away from Good A and towards Good B, then the consumer's total utility will increase if:
A. MUA/PA < 0 and MUB/PB < 0. B. MUA/PA < MUB/PB. C. MUA/PA > MUB/PB. D. MUA/PA > 0 and MUB/PB > 0.