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Economics Homework Three Answers - Student Ten (view source)
Revision as of 12:26, September 28, 2009
, 12:26, September 28, 2009revised
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. In the equation, the change in Q is a smaller number than the change in P, so it is a proper fraction (<1). A luxury is something that people ''want'', not really need, so they can do without it if the price goes up. The change in Q is larger than the change in P, so it will be an improper fraction (>1).
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. In the equation, the change in Q is a smaller number than the change in P, so it is a proper fraction (<1). A luxury is something that people ''want'', not really need, so they can do without it if the price goes up. The change in Q is larger than the change in P, so it will be an improper fraction (>1).
:Excellent, will use as a model answer!
:Excellent statements, but see model answers for a discussion of the mistake in the question. Full credit given.
'''5. What is a substitute for french fries, and what is a complement for them?'''
'''5. What is a substitute for french fries, and what is a complement for them?'''