Elasticity and Its Applications

Which of the following two goods is more likely to be inelastically demanded?

• Demand for tangerines

• Demand for fruit

• Demand for beef next month

• Demand for beef over the next decade

Which of the following two goods is more likely to be inelastically demanded?

• Demand for Exxon gasoline at the corner of 7th and Grand

• Demand for gasoline in the entire city

• Demand for insulin

• Demand for vitamins

After a public information campaign highlighting that bacteria and other organisms cause and spread disease, will the demand curve for soap be more elastic or more inelastic?

• More inelastic

• More elastic

After the invention of nuclear power plants, will the demand curve for coal power plants be more elastic or more inelastic?

• More elastic

• More inelastic

After more employers allow employees to telecommute, will the demand curve for cars be more elastic or more inelastic?

• More elastic

• More inelastic

After an economic boom, will the demand curve for TVs be more elastic or more inelastic?

• More elastic

• More inelastic

During the Middle Ages, the African city of Taghaza quarried salt in 200-pound blocks to be sent to the salt market in Timbuktu, in present-day Mali. Travelers report that Taghazans used salt instead of wood to construct buildings. Compared with other towns without big salt mines, was the demand for wood more elastic or more inelastic in Taghaza?

• More elastic

• More inelastic

If the elasticity of demand for college textbooks is -0.1, and the price of textbooks increases by 20%, how much will the quantity demanded change, and in what direction?

• The quantity demanded increases by 2%

• The quantity demanded decreases by 20%

• The quantity demanded decreases by 2%

• The quantity demanded remains the same

If the elasticity of demand for spring break packages to Cancun is -5, and if you notice that this year in Cancun the quantity of packages demanded increased by 10%, then what happened to the price of Cancun vacation packages?

• The price fell by 10 percent

• The price fell by 2 percent

• The price increased by 2 percent

• The price remained the same

In your college town, real estate developers are building thousands of new student-friendly apartments close to campus. If you want to pay the lowest rent possible, should you hope that demand for apartments is elastic or inelastic?

• Elastic

• Inelastic