Problem 1
Use each of the terms below in a sentence that gives an example of the term: a. elastic b. inelastic c. total revenue
Problem 1
Explain the differences between the terms in each of the pairs below: a. change in quantity demanded change in demand b. income effect substitution effect c. normal goods inferior goods d. substitutes complements
Problem 2
What feature of demand curves is explained by the law of diminishing marginal utility?
Problem 3
Why are elastic goods and services said to be price sensitive?
Problem 3
How does the income effect influence consumer behavior when prices rise?
Problem 4
What are the factors that affect elasticity of demand and how does each affect elasticity?
Problem 4
Why might an increase in income result in a decrease in demand?
Problem 5
Analyze the factors that determine elasticity to explain why utilities companies never offer sale prices on their services.
Problem 5
Why does the demand curve slope downward?
Problem 5
What else besides migration might account for a change in market size?
