Answer to Question #249823 in Macroeconomics for michael

Question

) For each of the following pairs of goods, which good would you expect to have more elastic demand and why?

a. required textbooks or mystery novels

b. Beethoven recordings or classical music recordings in general

c. subway rides during the next 6 months or subway rides during the next 5 years

d. root beer or wate

Answer 1

a) Mystery novels will have a more elastic demand because they are not a necessary product, unlike the required textbooks.

b) Beethoven recordings will have a more elastic demand because they are a part of the larger set of classical music recordings.

c) Subway rides will have a more elastic demand during the next 5 years because people have a longer time to adjust to any changes in price unlike subways rides during the next six years.

d) Root beer will have a more elastic demand because it is not a necessity, unlike water.