Question

42. Besides just offering low prices, how can could a firm make their product or service more inelastic?

A. Offering WOW customer service and studying new ways to generate repeat business
   B. Improving the quality of the product or service
   C. Offering loyal customers some type of reward like free air and hotel travel to Las Vegas   
   D. All of the above

43. Which item below represents a non-price marketing strategy?   

Sending thank you cards to your customers thanking them for their loyalty
B. Improving the customer service
C. Offering a one-year money back guarantee   
D. All of the above

44. Why do local governments like to tax inelastic goods such as liquor and cigarettes?

A. Inelastic goods tend to be price insensitive.
B. Consumers can’t easily stop using inelastic goods
C. The government has an easier time collecting more tax revenue
D. A, B and C are all correct responses.

45. A product or service will become more elastic over time because:

A. This is a false statement. Over time products become more inelastic
B. With more time consumers can look for substitute goods or services
C. The inflection point of the demand curve will point up
D. All of the statement above are false
46. When Coca-Cola put real cocaine in their drink in the early 1900s, then what did they create?

A. A more inelastic demand curve
B. A more elastic demand curve
C. A new equilibrium point on the total revenue curve
D. A new equilibrium point on the Production Possibilities Curve
49. The source of all economic problems comes from what?

   A. Greedy people
   B. Scarcity
   C. The fact that people don’t have enough money to buy what they need
   D. The fact that government charges too much in taxes

Answer 1

42) Besides just offering low prices, how can a firm make their product or service more inelastic?

D) All of the above

Explanation: All the options make the product or service more desired by the consumers over its substitutes, making the demand more inelastic.

43) Which item below represents a non-price marketing strategy?

D) All of the above.

Explanation: All the given options are examples of non-price marketing strategy.

44) Why do local governments like to tax inelastic goods such as liquor and cigarettes?

B) Consumers can't easily stop using inelastic goods.

Explanation: Inelastic goods are those whose demand do not change much with change in their prices. Addictive goods like liquor and cigarettes are clearly inelastic.

45) A product or service will become more elastic over time because :

B) With more time consumers can look for substitute goods or services.

Explanation: As more time passes, consumers can look for substitute options to which they can switch when price of the good or services rises, making the demand more elastic.

46) When Coca-Cola put real cocaine in their drink in the early 1900s, then what did they create?

A) A more inelastic demand curve

Explanation: The cocaine made the drink addictive. So its demand couldn't change much when price changed, making the demand curve more inelastic.

47) The source of all economic problems comes from what?

B) Scarcity

Explanation: The fact that our desires are unlimited while the resources are scarce is the source of all economic problems. We study Economics to learn the optimal way to utilize the given resources to maximize our desires or satisfaction.