Eco 3B Final

Goods with elastic demand are the best choice for heavy taxation.

• TRUE

• FALSE

• God Know's

• Ask Modi

How does elasticity affect factor pricing?

• Wages are fixed and unaffected by elasticity

• Inelastic demand allows workers to demand higher wages

• Elastic demand increases the cost of production

• Elasticity only affects producers, not workers

In the long run, demand tends to become

• more elastic

• less elastic

• unitary

• all of the above

Durable goods like washing machines have inelastic demand

• True

• False

• Too tired to answer

• 🙃Maybe?

If a product takes up a small share of your income, its demand is likely to be:

• Elastic

• Inelastic

• Perfectly elastic

• Unit elastic

Assertion(A): Longer the duration, greater will be elasticity of demand

Reason(R): Consumer can change consumption habit in long run in favor of cheaper substitutes

• A is true but R is false

• A is false but R is true

• Both A and R are true

  as R is correct explanation of A

• Both A and R are true

  but R is not correct explanation of A

A commodity which has multiple use will have

• Perfectly elastic demand

• perfectly inelastic demand

• Relatively elastic demnad

• Relatively inelastic demand

Which good will likely have the most elastic demand?

• salt

• sugar

• milk

• car

Both very rich and very poor consumers tend to have inelastic demand for essentials

• True

• false

• No comment

• Guess?

Goods with many substitutes have more elastic demand

• True

• false

• Think harder!

• Ask teacher