Marginal Analysis, Roller Coasters, Elasticity, and Van Gogh

(a)   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 (a)   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