Does the Assumption in the Krugman Model That Demand Becomes

question 29

Essay

Does the assumption in the Krugman model that demand becomes less elastic as consumption increases seem realistic to you? Why or why not? What would the PP schedule in Krugman's basic diagram look like if demand became more elastic as per capita consumption increased?

---

Definitions:

Electrical Resistance

A measure of the degree to which an object opposes the passage of an electric current.

Ventricular Contraction

This refers to the phase in the cardiac cycle where the ventricles (lower chambers of the heart) contract to pump blood out to the body and lungs.

Apex

Extremity of a conical or pyramidal structure. The apex of the heart is the rounded tip directed anteriorly and slightly inferiorly.

AV Bundle

The bundle of His, which is a collection of heart muscle cells specialized for electrical conductivity that transmits the electrical impulses from the AV node to the point of the apex of the fascicular branches.