In which situation is marginal utility of water probably the highest? ( a) In a
ID: 1248805 • Letter: I
Question
In which situation is marginal utility of water probably the highest?
(a) In a wet climate where water is used extensively in wet-field rice fields, for example
(b) In the Australian desert
(c) In areas taht have recently been flooded
(d) In rich countries
(e) None of the above
An economist investigates the demand for the products of your firm, JIA stone building materials and finds that the price elasticity equals 0.3. On the basis of this finding, you--if you can control price--should
(a) Lower price to increase volume
(b)Raise price, hoping to increase revenue
(c) Keep price constant
(d) Not enough information is given to answer
If we observe taht fresh pasta is available in grocery stores located in wealthy neighborhoods but not in stores of the same chain located in poor neighborhoods we can conclude that the chain believes
(a)The demand for fresh pasta is highly elastic
(b)Fresh pasta has high income elasticity
(c) the supply of fresh pasta is inelastic
(d) fresh pasta is an inferior good
Explanation / Answer
1. probably c), because there will be a lack of fresh, non contaminated water. 2. b) Raise price, when you have inelastic demand, raising price increases revenue. 3. b) fresh pasta has high income elasticity.