Question

question 24
in order to prove that motrin and ibuprofen are substitutes, one should measure the _____ and get a

• price - elasticity of demand number less than 1 (in absolute value)
• price - elasticity of demand number greater than 1 (in absolute value)
• cross - price elasticity: negative number
• cross - price elasticity: positive number

question 25
the average price of gasoline in your neighborhood is $3.99 per gallon. your neighbor diana tells you that you can go to a gas station 20 miles outside your neighborhood where the price of gasoline is $3.43 per gallon. however, she also says there are usually long lines at that station. is her suggestion beneficial to you?

• no, i am factors in the non - monetary opportunity costs (driving time and waiting in line).
• yes, the lower price of gasoline at the rival station increases my purchasing power and enables me to consume more of other goods.
• yes, since gasoline is a necessity for car owners, the total cost savings would be relatively substantial.
• no, my friend is misled clearly, the lower - priced gasoline must be of inferior quality and could damage vehicles.

Explanation:

Question 24: Cross - price elasticity measures the responsiveness of the quantity demanded of one good to a change in the price of another good. For substitute goods, cross - price elasticity is positive. When the price of one substitute (e.g., Motrin) rises, the quantity demanded of the other (e.g., Ibuprofen) increases.
Question 25: We need to consider non - monetary opportunity costs like driving time and waiting in line. Just because the price per gallon is lower at a far - away gas station doesn't mean it's beneficial overall if the time and effort cost is high.

Answer:

Question 24: cross - price elasticity: positive number
Question 25: No, if we factor in the non - monetary opportunity costs (driving time and waiting in line).