1.Pick the statement that BEST describes the LAW OF DIMINISHING MARGINAL UTILITY. A. An additional lane...

1.Pick the statement that BEST describes the LAW OF DIMINISHING MARGINAL UTILITY.

	A.	An additional lane of highway will be LESS useful than the previous lane built
	B.	An additional lane of highway will be MORE useful than the previous lane built
	C.	An additional lane of highway will have a harmful effect on society
	D.	An additional lane of highway will always be worth its cost

SUGAR (and other ingredients) in the making of candy bars is

	A.	Variable
	B.	Fixed

A gasoline station, very near a professional football stadium, parks cars on its lot to make money on game days. Last year it charged $10.00 per car and parked 700 cars. This year it lowered the parking price to $6.00 and parked 1,000 cars. Is the demand for this parking lot INELASTIC or ELASTIC?

	A.	Inelastic
	B.	Elastic

Last year, a local amusement park sold 10,000 tickets at $40.00 each. This year, it lowered the ticket price to $30.00 and sold 15,000 tickets. Is the demand for this amusement park INELASTIC or ELASTIC?

	A.	Inelastic
	B.	Elastic

Solutions

Expert Solution

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Answer 1

The LAW OF DIMINISHING MARGINAL UTILITY means the utility of any product is decreased after consumption.

Here additional lane is to be built. It means utility of previous lane will be as usual but now there will be option to use second lane also. So correct answer is-

D. An additional lane of highway will always be worth its cost

Answer 2

Variable cost changes with production. If there is no production then there is no variable cost. So sugar is variable cost.

Answer 3

Elastic demand means sales will increase if sell price are decreased and vice versa. So here number of car parks has increased from 700 to 1000 when fee is decreased from $ 6 to $ 10. So the demand is elastic.

Answer 4

Elastic demand means sales will increase if sell price are decreased and vice versa. So here number of tickets sold has increased from 10000 to 15000 when price is decreased from $ 40 to $ 30. So the demand is elastic.

ekkarill92 answered 1 year ago

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