A)Classify and Draw the Demand Curves for Two Goods with the Following

question 92

Essay

a)Classify and draw the demand curves for two goods with the following price elasticities of demand:
i)Price elasticity of demand = ∞
ii)Price elasticity of demand = 0
b)Consider two goods: A and B.Good A has many close substitutes,while Good B has only a few.An individual spends an equal amount of his budget on both goods.Given this information,which of the two goods will have a higher price elasticity of demand?
c)Consider two goods: A and B.Both goods have the same number of substitutes,but consumers spend a higher proportion of their income on Good A than on Good B.Given this information,which of the two goods will have a higher price elasticity of demand?

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Definitions:

Somatic Nervous system

A part of the peripheral nervous system associated with the voluntary control of body movements via the use of skeletal muscles.

Peripheral Nervous System

The component of the nervous system that includes the nerves and ganglia located outside the brain and spinal cord.

Increased Electrical Activity

A situation or condition where there is a rise in the electrical signals in a system, such as the neural activity in the brain or electrical systems.

Julio's Amygdala

A personalized reference to the amygdala, a region of the brain involved in processing emotions, which is responsible for detecting fear and preparing for emergency events.