If Canadians Suddenly Develop a Strong Urge to Escape the Cold

question 61

Multiple Choice

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

• A)price of a vacation in Hawaii rises and the quantity demanded of Hawaiian vacations decreases.
• B)price of a skiing vacation in the mountains rises.
• C)initial result of the change is a surplus of vacations in Hawaii, leading to a price rise.
• D)price of airline tickets falls as ticket agents make deals in response to this change.
• E)price of luggage will rise, because luggage and vacations are complements.

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Definitions:

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in its price.

Total Budget

The overall amount of money allocated for a specific purpose or period.

Large Part

A phrase indicating a significant portion or majority of a whole.

Elastic Demand

A situation where the quantity demanded of a product changes significantly in response to a change in price.