There Is No True Substitute for Coffee

question 52

True/False

There is no true substitute for coffee. If the price goes from $8 to $12 for a package of k-cups due to a coffee bean shortage, demand will remain relatively unchanged. This is an example of demand elasticity.

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Definitions:

Scarce Resources

Resources that are limited in supply and cannot meet all the demands placed on them, necessitating allocation decisions.

Nonexcludable Good

A good that cannot be withheld from individuals once it has been provided, leading to free-riding issues.

National Defense

The protective measures and military actions that a country undertakes to defend itself against threats and maintain national security.

Market Failure

Occurs when the allocation of goods and services by a free market is not efficient.