The CEO of a Fortune 500 company goes to a convenience store and finds many options for chewing gum. His demand for gum is likely: a elastic because it is a small portion of his income. b elastic because he has many options. c inelastic because it is a small portion of his income. d inelastic because he has few options.

The CEO of a Fortune 500 company goes to a convenience store and finds many options for chewing gum. His demand for gum is likely: a elastic because it is a small portion of his income. b elastic because he has many options. c inelastic because it is a small portion of his income. d inelastic because he has few options.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 5MC

See similar textbooks

Similar questions

Ceb's income has just risen from $950 per week to $1,050 per week. As a result, she decides toincrease the number of movies she attends each month by 5 percent. Her demand for movies is enelastic because
Question 26 Any combination of goods lying outside of the budget line: implies that the consumer is not spending all his income. yields less utility than any point on the budget line. is unobtainable, given the consumer's income. yields less utility than any point inside the budget line.
The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, p,is $2, and the price of barley, pb, is $3, and income, Y, is $1000, the incomeelasticity of wheat is
The demand of normal good rises when the income of consumer is rising True/False
True or False. Inelasticity demand occurs when consumers are highly sensitive to price changes.
Find the income elasticity
Clarice has a utility function: U(Y) = 1000 - (100/Y), where Y is her income. clarice has just graduated from college and has a career choice for her first job of either working as a teacher and earning $40,000 or trying to become a theatre lighting director and earning $70,000 (if there is growth in the demand for theatre) or $20,000 (if there isn't growth in the demand for theatre). there is a 50% probability of growth. a consulting firm guarantees Clarice that it already knows whether there will be growth in the demand for theatre next year. what is the maximum amount Clarice should be willing to pay for this information?
Suppose you know the demand curve is inelastic. This means that Question 2 options: if price goes down, revenues go up If price goes up, revenues go down If price goes up, revenues go up If price goes down, the quantity demanded goes down
Question 19 Laila decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Laila: has a higher "marginal utility to price ratio" for the hockey game than for the play. obtains more marginal utility from the play than from the hockey game. is relatively unappreciative of the arts. has recently attended several other Broadway plays.
The demand for a normal good rise when the income of the consumer rise. True/False
Question 6 A consumer spends all of her income on two goods, coffee and doughnuts. She buys coffee at 25 cents per unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchased at 75 cents a unit with a total utility of 200 and a marginal utility of 24. To increase her total utility, the consumer should: Buy more coffee and less doughnuts Buy more of both goods Do nothing. She is currently maximizing utility with her limited budget. Buy less of both goods Buy more doughnuts and less coffee.
Title If the cross elasticity of demand between two goods is negative, then the two goods are: (a) normal... Description If the cross elasticity of demand between two goods is negative, then the two goods are: (a) normal goods (b) unrelated goods (c) complements (d) substitutes (e) inferior goods.