Changes

'''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.  

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.  

:Interesting example!

:Interesting example!

:Right, but note that income elasticity is specific to a particularly good, just as price elasticity is.  (Minus 1).

:Right, but note that income elasticity is specific to a particularly good, just as price elasticity is.  (Minus 1).

'''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.'''

:The opposite is true.  (Minus 1).

:The opposite is true.  (Minus 1).