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Elasticity quiz answers
Jan. 4th, 2011 08:53 pmThe questions:
1. Give an example of something where you would expect demand to be price elastic. Explain why.
2. Give an example of something where you would expect demand to be price inelastic. Explain why.
3. Give an example of something where you would expect demand to be income elastic. Explain why.
4. Here's a good one: give an example of something where you would expect demand to be negatively price elastic; that is a good or service where an increase in price would actually lead to an _increase_ in demand.
( And now the answers: )
1. Give an example of something where you would expect demand to be price elastic. Explain why.
2. Give an example of something where you would expect demand to be price inelastic. Explain why.
3. Give an example of something where you would expect demand to be income elastic. Explain why.
4. Here's a good one: give an example of something where you would expect demand to be negatively price elastic; that is a good or service where an increase in price would actually lead to an _increase_ in demand.
( And now the answers: )
