The Elasticity of Demand for a Product Is Likely to Be

question 294

Multiple Choice

The elasticity of demand for a product is likely to be greater,

• A)if the product is a necessity, rather than a luxury good.
• B)the greater the amount of time over which buyers adjust to a price change.
• C)the smaller the proportion of one's income spent on the product.
• D)the smaller the number of substitute products available.

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Definitions:

ITQs

Individual Transferable Quotas, a fishery management tool that allocates a certain quantity of a fishery resource to individuals or companies.

Pacific Halibut

A large flatfish species found in the North Pacific Ocean, prized for its commercial and recreational fishing value.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Conflict Diamonds

Diamonds that are mined and sold by combatants in war zones in Africa as a way to provide the currency needed to finance their military activities.