Author Question: The opportunity cost to the consumer of purchasing and consuming one more unit of a good is called ... (Read 43 times)

mspears3 · **on:** Jun 29, 2018

The opportunity cost to the consumer of purchasing and consuming one more unit of a good is called the marginal benefit.

Indicate whether the statement is true or false

Question 2

Joe's monthly income increases from 1,000 to 2,000. As a result, he decreases the number of his fast food meals from 20 to 5 per month. To Joe, are fast-food meals a normal or an inferior good? What kind of elasticity can tell the answer? Explain.

What will be an ideal response?

ambernicolefink · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

FALSE

Answer to Question 2

Fast-food meals are an inferior good to Joe because his income elasticity of demand for fast-food meals is negative: as Joe's income increases, the quantity of fast-food meals he demands decreases.