5. if the price of walnuts rises, many people would switch from consuming walnuts to consuming cashews. but…

5. if the price of walnuts rises, many people would switch from consuming walnuts to consuming cashews. but if the price of salt rises, people would have difficulty purchasing something to use in its place. these examples illustrate the importance of\na. the availability of close substitutes in determining the price elasticity of demand.\nb. a necessity versus a luxury in determining the price elasticity of demand.\nc. the definition of a market in determining the price elasticity of demand.\nd. the time horizon in determining the price elasticity of demand.\n6. the price elasticity of supply measures how much\na. the quantity supplied responds to changes in input prices.\nb. the quantity supplied responds to changes in the price of the good.\nc. the price of the good responds to changes in supply.\nd. sellers respond to changes in technology.

5. if the price of walnuts rises, many people would switch from consuming walnuts to consuming cashews. but if the price of salt rises, people would have difficulty purchasing something to use in its place. these examples illustrate the importance of\na. the availability of close substitutes in determining the price elasticity of demand.\nb. a necessity versus a luxury in determining the price elasticity of demand.\nc. the definition of a market in determining the price elasticity of demand.\nd. the time horizon in determining the price elasticity of demand.\n6. the price elasticity of supply measures how much\na. the quantity supplied responds to changes in input prices.\nb. the quantity supplied responds to changes in the price of the good.\nc. the price of the good responds to changes in supply.\nd. sellers respond to changes in technology.

Answer

Brief Explanations:

  1. For question 5, when the price of walnuts rises, people switch to cashews as they are close - substitutes, while for salt with no close - substitutes, people can't easily switch. This shows the role of close substitutes in price elasticity of demand.
  2. For question 6, by definition, price elasticity of supply measures how the quantity supplied responds to changes in the price of the good.

Answer:

  1. a. the availability of close substitutes in determining the price elasticity of demand.
  2. b. the quantity supplied responds to changes in the price of the good.