Chapter 5 homework

Why is the demand for some goods either elastic or inelastic?
What happens to the housing rental market if your community has a big boom in apartment production?
Would demand be elastic or inelastic?
Define elastic, inelastic, and unitary
How do you calculate the income elasticity of demand?
How do you calculate the elasticity of supply

Elasticity Concepts: a. Define the concept of price elasticity of demand (PED) and income elasticity of demand (YED). b. How is price elasticity of demand calculated, and what does the value of PED signify in terms of a product’s responsiveness to price changes? c. Explain the key factors that determine whether a good has elastic or inelastic demand.
Identifying Elastic and Inelastic Goods: a. Provide an example of a product with inelastic demand and explain why the demand for this product is relatively insensitive to price changes. b. Give an example of a product with elastic demand and clarify why the demand for this product is responsive to price fluctuations. c. Can a luxury car be an example of inelastic demand? Justify your answer.
Real-World Applications: a. Give a real-world example of a product or service with highly elastic demand and discuss how changes in price affect its demand. b. Provide a real-world example of a product or service with inelastic demand and explain why consumers are not very responsive to changes in its price. c. Consider the impact of an increase in the minimum wage on the demand for fast food versus the demand for prescription medication. How might the price elasticity of demand play a role in these scenarios?

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