Vihaan Works for an Environmental Agency

question 48

Multiple Choice

Vihaan works for an environmental agency. Every day he brings a reusable water bottle to work, which he fills from the water purifier as needed, rather than buying plastic, disposable spring water bottles. Joe most likely derives utility from:

• A)the taste of purified water from his reusable bottle.
• B)the knowledge that he is doing something good for the environment by avoiding plastic bottles.
• C)the knowledge that others in his firm observe his environmentally-friendly choice.
• D)all three of these sources.

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Definitions:

Infinitely Elastic

Describes a perfectly elastic demand or supply curve, where the quantity demanded or supplied changes by an unlimited amount in response to any change in price.

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in income.

Supply Elasticity

The measure of responsiveness of the quantity of a good supplied to a change in its price.

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust all inputs in response to market conditions.