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When people's income goes up, they tend to buy more goods and services.

When people's income goes up, they tend to buy more goods and services.

'''3. A nearly perfectly elastic demand curve is nearly ''vertical'' in shape; a nearly perfectly inelastic demand curve is nearly ''horizontal'' in shape.'''

'''3. A nearly perfectly elastic demand curve is nearly''' ''vertical'' '''in shape; a nearly perfectly inelastic demand curve is nearly''' ''horizontal'' '''in shape.'''

'''4. Why is the name "necessity" given to a good that has a price elasticity of less than one, and the name "luxury" given to a good that has a price elasticity of more than one?'''

'''4. Why is the name "necessity" given to a good that has a price elasticity of less than one, and the name "luxury" given to a good that has a price elasticity of more than one?'''

When the price elasticity is low, generally it is a good that people ''need''   

When the price elasticity is low, generally it is a good that people ''need'', such as food, fuel, or shelter,and will pay more for