Question

1. The student relies on a survey of the study and sleep habits of 1,000 students, to conclude that if he sleeps 8 hours before his exam, this should guarantee a good grade. The student used the inductive method to reach the conclusion

a) True

b) False

2. The characteristics of the goods suggest the type of elasticity of demand they may have. For example, a staple product tends to have an elasticity of demand:

a) elastic

b) unitary

c) inelastic

d) perfectly inelastic

Answer 1

1. True. This is the CORRECT choice.

In inductive method, data is gathered and then broad generalization is made. This kind of reasoning is also known as conjecture. This may not have any scientific basis though as there is no proof or evidence to relate to.

2. Inelastic. This is the CORRECT choice.

Elasticity of demand indicates how demand is related to price. For non-essential goods, consumers may withhold purchase decision if prices rise. But essential commodities are necessity especially for poor and underprivileged. Thus staple goods tend to be inelastic as these are necessities.