Marginal Analysis, Roller Coasters, Elasticity, and Van Gogh

__________ analysis is an analysis of how individuals, businesses, and governments make decisions.

What do we call the satisfaction, or happiness, that people get from consuming a good or service?

• utility

• joy factor

• positive economics

Marginal analysis is one way to explain consumer behavior.

• True

• False

The Law of ________ states that the increase in price gives producers and incentive to produce more.

The reason why diamonds are more expensive than water is because ...

• the marginal utility of water is low.

• the marginal utility of water is high.

• there are more diamonds than water.

• the marginal utility of diamonds is low.

Utility is subjective.

• True

• False

Elasticity shows how sensitive quantity is to a change in price.

• True

• False

Is the demand for gasoline elastic or inelastic?

• Inelastic

• Elastic

Is the demand for pizza elastic or inelastic?

• Elastic

• Inelastic

Microeconomics analyzes the details by using marginal analysis and elasticity.

• True

• False