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Chapter 19: Q. 2 - Critical Thinking Questions (page 431)

Is the students' supply of learning tasks relatively elastic or inelastic? Explain.

Short Answer

Expert verified

The elasticity of a product is heavily influenced by the availability of close substitutes.

In the case of gasoline, the presence of an alternate energy source may or may not act as a substitute.

Step by step solution

01

Given information 

The given sentences are : (1).

The elastic of a product largely depends

02

Explanation (1)

The availability of close substitutes greatly influences a product's elasticity. When substitutes are available, consumers can easily switch to them when the price of the product rises significantly. Similarly, if the price of any of a product's substitutes falls, demand for that product may fall.

03

Given information 

The given sentences are : (2).

that gasloine demand is becoming less inelastic.

04

Explanation (2)

In the case of gasoline, the presence of an alternative energy source may or may not serve as a substitute. As previously stated, the cross price elasticity of demand can be used to calculate the effect of changes in the price of substitutes on the demand product. Given that gasoline demand is becoming less inelastic, its demand may fall if the price of its substitute, such as battery power, falls.

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Most popular questions from this chapter

Describe the factors that determine the price elasticity of demand

A 5percent increase in the price of digital apps reduces the amount of tablet devices demanded by 3percent. What is the cross price elasticity of demand? Are tablet devices and digital apps complements or substitutes ?

The diagram below depicts the demand curve for "miniburgers" in a nationwide fast-food market. Use the information in this diagram to answer the questions that follow.

Quantity (mini burgers per day)

a. What is the price elasticity of demand along with the range of the demand curve between a price of \(0.20per miniburger and a price of role="math" localid="1651796932841" \)0.40per miniburger? Is demand elastic or inelastic over this range?

b. What is the price elasticity of demand along with the range of the demand curve between a price of \(0.80 per miniburger and a price of \)1.20 per miniburger? Is demand elastic or inelastic over this range?

c. What is the price elasticity of demand along with the range of the demand curve between a price of \(1.60 per miniburger and a price of \)1.80 per m ? Is demand elastic or inelastic over this range?

At a price of \(25,000, producers of midsized automobiles are willing to manufacture and sell 75,000cars per month. At a price of \)35,000, they are willing to produce and sell 125,000a month. Using the same type of calculation method used to compute the price elasticity of demand, what is the price elasticity of supply? Is supply elastic, unit-elastic, or inelastic?

The value of cross price elasticity of demand between goods Xand Yis 1.25, while the cross price elasticity of demand between goods Xand Zis -2.0. Characterize Xand Yand Xand Zas substitutes or complements.
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