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Chapter 4: Q. 2 (page 90)

Why do you think that economists seek to study prices measured in terms of dollars per unit as measured, say, by weight or by volume rather than by prices per package or per container? Explain your reasoning.

Short Answer

Expert verified

Measuring per weight or volume is standard as packages or containers may vary in terms of quantity it can store.

Step by step solution

01

Step1. Given information

Economists seek to study prices measured in terms of dollars per unit as measured, say, by weight or by volume rather than by prices per package or per container.

02

Step2. Explanation

Measuring in terms of per weight or volume is standard because 1 kg of quantity A and 1 kg of quantity B have the same weight- 1kg and are hence comparable. But, measuring in terms of containers would mean same subjected to if the containers are of same weight/volume.

Hence, economists seek to study prices measured in terms of dollars per unit as measured, say, by weight or by volume rather than by prices per package or per container

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