For each pair of goods, explain which is more elastic: toothpicks vs. cars; electricity vs. yachts; IBM computers vs. Apple computers.
What will be an ideal response?
The more elastic are cars, yachts, and IBM computers. Cars take a larger fraction of income than do toothpicks, electricity is a necessity vs. luxury yachts, and there are many IBM clones (while the substitutes for Apples are not as close).
You might also like to view...
The assumption of completeness means that
A) the consumer can rank all possible consumption bundles. B) more of a good is always better. C) the consumer can rank all affordable consumption bundles. D) all preferences conditions are met.
The median-voter theorem suggests that:
A. voters tend to vote with a "mob-mentality," all voting the same. B. Politicians always receive more votes in general elections when they appeal to extremists in their party. C. the middle voter is generally influenced by the side they have more information on concerning an issue. D. politicians maximize their votes by taking the policy position preferred by the median voter, under certain conditions.
An increase in technology causes the optimum level of capital per worker to rise in the long run or steady state
a. true b. false
If a bank has a required reserve ratio of 15% and has required reserves of $225,000,000 how much does the bank hold in deposits?
a. $33,750,000 b. $210,000,000 c. $240,000,000 d. $1,500,000,000