Question

Choose the correct price-elasticity label for each pair of goods below. Assume this involves demand for the total of all people currently residing in Canada, the United States, and Mexico: (Insert: more elastic than or less elastic than)Cosmetic surgery ..............Emergency surgeryA cheeseburger at 7:00 PM ................at a 24-hour restaurant A cheeseburger at 2:00 AM at a 24-hour restaurantMonthly electricity consumption .............. Yearly electricity consumptionAll cars................... Red carsThe Wall Street Journal ...................Wall Street Journal at the airport

Answer 1

Answer:  

1. Cosmetic surgery is more elastic than Emergency surgery
2. A cheeseburger at 7:00 PM at a 24-hour restaurant  is more elastic than a cheeseburger at 2:00 AM at a 24-hour restaurant
3. Monthly electricity consumption is less elastic than Yearly electricity consumption
4. All cars is more elastic than Red cars
5. The Wall Street Journal is more elastic than Wall Street Journal at the airport

Explanation:

1. Emergency surgery is a necessity and when there is necessity the demand will be rather inelastic.
2. At 7 PM there are more restaurants open so there are more offer than 2 AM and where there is more offer, the demand is more elastic as you can choose for many restaurants.
3. Elasticity tends to increase in the long term because consumers have more time to adjust their behavior and adapt, so monthly electricity consumption is less elastic.
4. If there are more substitutes (any color car), the demand for the good will be elastic and its consumption can be replaced. On the contrary, if there are few substitutes (only red cars), the demand will tend to be inelastic.
5. In the airport you will have less places to buy Wall Street Journal and less time than in other places so the demand will be less elastic.