Elasticity of Demand

Fill in the blank: Elasticity of demand measures how responsive quantity demanded is to a change in ________.

• Supply

• Price

• Quantity

• Coefficient

Any coefficient greater than 1 is called an elastic coefficient.

• True

• False

Fill in the blank: If a good has many substitutes it's demand tends to be more _________.

• Elastic

• Inelastic

The demand for necessities tends to be more ________ than for luxuries.

• Elastic

• Inelastic

The demand for goods that take up a small portion of household income, such as pencils, are more _______.

• Elastic

• Inelastic

For which of the following products would demand be elastic?

• Gasoline

• Bread

• Skittles

• Insulin

The longer the time period a seller has to increase production, the more ______ the supply will be.

• Elastic

• Inelastic

Cars have an inelastic supply because they are expensive to produce.

• True

• False

Milk has an elastic supply because it is difficult to store large volumes of it in a manner that will keep it fresh.

• True

• False