Question

1)The price elasticity of demand for candles is __________ because as the price of candles rises by 21%, the quantity demanded of candles falls by 14%.

Group of answer choices

a)inelastic

b)none of the other three answers

c)unitary elastic

d)elastic

2) If the % change in the quantity demanded of bicycles is greater than the % change in the price of bicycles, then bicycles are __________ .

Group of answer choices

a)Inelastic

b)Unitary elastic

c)Elastic

d)Infinitely elastic

4)All of the following have highly elastic demand curves except _______.

a)spaghetti noodles

b)goods with many substitutes

c)vacation cruises

d)gasoline and oil

Answer 1

Answer
1
The correct answer is "option a"
a)inelastic

Elasticity=(% change in quantity demanded/% change in price)
=14/21
=0.67
The demand is inelastic

2.
The correct answer is "option c"
c)Elastic

Elasticity=(% change in quantity demanded/% change in price)
if % change in quantity demanded>% change in price then demand will be elastic
For example if
% change in quantity demanded=10
% change in price=5
then elasticity =2

4.
The correct answer is "option d"
d)gasoline and oil

Gasoline and oil have fewer substitutes and are hence more inelastic then the other given options. Good with lesser substitutes tend to have less elastic demand.