price elasticity 3
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Answer all questions (175 word min):
1. Compare and contrast the price elasticity of supply and price elasticity of demand, and define income elasticity and how it distinguishes normal and inferior goods.
2. In economics, utility is a measure of happiness. Economists assume firms maximize profits and consumers maximize utility or happiness. What is the utility maximizing principle for consumers? In your own experience, does this principle make sense?
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