Question : Which of the following goods is likely to have the most elastic demand?
Option 1: Gasoline
Option 2: Salt
Option 3: Insulin
Option 4: Electricity
Correct Answer: Gasoline
Solution : The correct answer is (a) Gasoline
Elasticity of demand depends on the availability of substitutes, the proportion of income spent on the good, and the necessity of the good. Gasoline tends to have a relatively elastic demand because there are often viable substitutes available, such as public transportation, carpooling, or electric vehicles. Additionally, as gasoline is a significant expense for many consumers and represents a larger proportion of their income, they are more likely to adjust their consumption in response to changes in price. Therefore, gasoline is likely to have a more elastic demand compared to the other goods listed.
Question : Which goods are most likely to have an elastic demand?
Option 1: Bread
Option 3: Luxury cars
Option 4: Gasoline
Question : Which of the following goods is most likely to have a perfectly inelastic demand?
Option 1: Salt
Option 2: Gasoline
Option 3: Luxury watches
Option 4: Soft drinks
Question : Which of the following goods is likely to have the least elastic demand?
Option 1: Cars
Option 2: Milk
Option 3: Airline tickets
Option 4: Movie tickets
Question : Which of the following goods is likely to have a negative cross elasticity of demand with coffee?
Option 1: Tea
Option 2: Sugar
Option 3: Milk
Option 4: Salt
Question : Which of the following goods is likely to have a positive cross elasticity of demand with coffee?
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