Suppose that we are looking at a durable good like a car or stove. As the time p

Question

Suppose that we are looking at a durable good like a car or stove. As the time period during which consumers can buy that good increases, the elasticity of demand for this good will:

Become more elastic

Become more inelastic

Remain the same

Not enough info (Unknown)

Suppose someone goes to the store to buy shows. She is prepared to pay $35 but finds out they are on sale for $25. Which of the following is correct?

The happiness she experiences from finding this great deal is called "Acquisition Utility"

The benefit from using the new shoes id called "Transaction Utility"

The Buyer lowers her utility derived from the shows due to the lower price

All the above are correct

None are correct

If the price of X decreases, and this decreases the demand for Y, then:

goods X and Y are substitutes

goods X and Y are complements

Skype is a good example of a network good because:

Skype is transmitted over an internetwork

The value of Skype becomes more valuable with an increase in the number of of people using the system

The value of Skype decrees when people use the system

All the above

Explanation / Answer

The more the consumers gets the time to chose the car, more elastic its demand will get.

OPTION B

THE utility which consumer gets because of difference in actual price and the expected price is known as transaction utility.

OPTION B

If decrease in price of X decreases the demand for Y, then they are said to be substitutes..

The value of Skype actually will go up if no of people using Skype would go up.

OPTION B

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