Question 1: Among the following products. Set forth which ones will likely face a more elastic demand, and which ones will likely face a more inelastic demand, and explain why for each product.
- Toothpaste
- Big Mac Hamburger
- Aspirin
- Gasoline
Question 2: If a person was required to take insulin to maintain a basic quality of life, the demand for this drug would be very inelastic. If the price for insulin increased drastically by many hundred or perhaps even thousands of dollars, would the demand remain inelastic? Why or why not?
Question 3:
A. Explain how total utility and marginal utility change as you eat the same food repeatedly during one sitting until you can eat no more.
B. Set forth one example from your own life that can serve as an exception to the principle of diminishing marginal utility. Explain why you believe it is an exception.