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Economics Homework Three Answers - Student Ten (view source)
Revision as of 13:17, September 24, 2009
, 13:17, September 24, 2009no edit summary
'''1. Give an example of a good that has a large price elasticity, meaning that a small decrease in price causes a big increase in demand.'''
'''1. Give an example of a good that has a large price elasticity, meaning that a small decrease in price causes a big increase in demand.'''
Gold. When the market price goes down people buy more because it is a good investment and they know the price will eventually go back up.
'''2. Explain the concept of income elasticity.'''
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 ________ in shape; a nearly perfectly inelastic demand curve is nearly __________ in shape.
'''