Rhonda has started a new job that almost doubles her income. She walks past the inexpensive ramen in the grocery store and thinks, “Well, I don’t have to eat that anymore!” Instead, she purchases some fresh vegetables and a steak. To Rhonda, the ramen falls into the category of _____________, because now that she can afford better, she doesn’t want it.
a. normal goods
b. temporary goods
c. inferior goods
d. nonutility goods
c. inferior goods
Goods for which demand declines as income rises (or conversely, for which demand rises as income falls) are called “inferior goods.”
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When is the price of a product demand determined?
What will be an ideal response?
Discuss the practical difficulties associated with practicing perfect price discrimination
What will be an ideal response?
If a tripling of price triples the quantity of a good supplied, the price elasticity of supply is
a. 3 b. 300 c. 1 d. -1 e. -3
Refer to the information provided in Figure 4.5 below to answer the question(s) that follow.
Figure 4.5Refer to Figure 4.5. At the world price of $15 per CD-Rom drive, the United States imports ________ million CD-Rom drives.
A. 3 B. 6 C. 9 D. 12