Jill Borts Believes That the Price Elasticity of Demand for Her

question 183

Multiple Choice

Jill Borts believes that the price elasticity of demand for her economics textbook is relatively inelastic. She argues "I was told I had to purchase a book written by Hubbard and O'Brien that is required by my instructor. If I wanted to buy a mystery novel I would have many authors to choose from. Therefore, the demand for mystery novels is more elastic than the demand for my textbook." Is Jill correct?

• A) The demand for the textbook is more inelastic, but Jill's reasoning is incorrect. The reason the textbook has an inelastic demand is that it is more expensive than any novel.
• B) She is correct.
• C) She is confused. She should have concluded that the textbook has a more elastic demand than a novel.
• D) She is correct that the textbook has a more inelastic demand, but that is because most students pay for their textbooks with credit or debit cards. Most people pay for novels and other books with cash or by check.

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Definitions:

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through conditioning, without delving into the underlying psychological causes.

Aversive Conditioning

A behavior conditioning technique in which unpleasant stimuli are associated with undesirable behaviors to discourage those behaviors.

Negative Response

An adverse or unwelcoming reaction to a stimulus, situation, or input.

Aversive Conditioning

A form of behavior therapy that involves reducing undesirable habits by teaching the subject to associate an unpleasant or aversive stimulus with the habit.