If a good has only a few, poor substitutes, is its demand elastic or inelastic?
What will be an ideal response?
The demand is inelastic. The fewer substitutes for a good, the more inelastic (less elastic) its demand.
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Insurance companies
A) pool risk and thereby lower people's utility. B) can earn a profit only if people are risk neutral. C) can increase risk averse people's utility. D) try to shift their customers' utility of wealth curves downward.
Suppose Bright Orange is large firm that grows and harvests oranges. Each orange yields 2 ounces of orange juice and exactly one orange peel. Bright Orange sells the orange juice to juice distributors and the orange peels to fragrance companies. The market demand for Bright Orange's oranges is equal to ________.
A) the demand for orange peels only B) the demand for orange juice plus the demand for orange peels C) the demand for orange juice only D) the difference between the demand for orange peels and orange juice
A firm will shut down in the short-run if
a. P>AVC
b. P
Public goods, as defined in economics, are a.. goods that are provided by the government b. overprovided because of their public nature c. provided efficiently in competitive markets but at too low a level d. subject to free-rider problems e. characterized by rivalry and nonexclusiveness