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Economics Homework Three Answers - Student Nine (view source)
Revision as of 19:00, September 27, 2009
, 19:00, September 27, 2009very good work
'''Economics Homework #3 '''
Mark B.
'''1.''' Luxury goods have a high price elasticity. An example of a luxury good that would have a high price is a Rolls Royce car.
:I think meant, "An example of a luxury good that would have a high price '''elasticity''' is a Rolls Royce car." Full credit.
'''2.''' Income elasticity is a term used for describing the relationship between the income of people and the demand of a good.
:Close, but need to emphasize that it is the relationship between the '''change''' in the income of people and the '''change''' in the demand of a good. (Minus 1).
'''3.''' A nearly perfectly elastic demand curve is nearly flat. A nearly perfectly inelastic demand curve is nearly vertical.
:Superb, may use as a model.
'''4.''' The name necessity is given to a good that has price elasticity of less than 1 because if the seller increases the price he will not lose revenue.
:Excellent, but the question also asked about a "luxury". (Minus 1).
'''5.''' A substitute for French fries is onion rings, and a complement for them is ketchup.
:Superb.
'''6.''' A normal good is a new car; an inferior good is a used car.
:Excellent, could explain a bit why that is true. Full credit.
'''7.''' There is a shortage, because fewer people want to supply the product at a low price, and more people are willing to buy it.
:Superb.
:Very good work. 68/70.--[[User:Aschlafly|Andy Schlafly]] 15:00, 27 September 2009 (EDT)
Mark B.
'''1.''' Luxury goods have a high price elasticity. An example of a luxury good that would have a high price is a Rolls Royce car.
:I think meant, "An example of a luxury good that would have a high price '''elasticity''' is a Rolls Royce car." Full credit.
'''2.''' Income elasticity is a term used for describing the relationship between the income of people and the demand of a good.
:Close, but need to emphasize that it is the relationship between the '''change''' in the income of people and the '''change''' in the demand of a good. (Minus 1).
'''3.''' A nearly perfectly elastic demand curve is nearly flat. A nearly perfectly inelastic demand curve is nearly vertical.
:Superb, may use as a model.
'''4.''' The name necessity is given to a good that has price elasticity of less than 1 because if the seller increases the price he will not lose revenue.
:Excellent, but the question also asked about a "luxury". (Minus 1).
'''5.''' A substitute for French fries is onion rings, and a complement for them is ketchup.
:Superb.
'''6.''' A normal good is a new car; an inferior good is a used car.
:Excellent, could explain a bit why that is true. Full credit.
'''7.''' There is a shortage, because fewer people want to supply the product at a low price, and more people are willing to buy it.
:Superb.
:Very good work. 68/70.--[[User:Aschlafly|Andy Schlafly]] 15:00, 27 September 2009 (EDT)