Name ______________________________

Date _______________________________
Homework
Elasticity
Part I: Directions: Re-read your notes. Then read and answer the question for each good in each column, and estimate the elasticity
of demand. Answer the questions that follows based on the chart.
Determin
ants of
elasticity
Yes
(elastic )
No
(inelastic)
Can the
purchase
be
delayed?
Are
adequate
substitut
es
available?
Does
purchase
use a
large
portion of
income?
Type of

Fresh
tomatoes,
corn, or
green
beans

Table
salt

Gasoline from
a particular
station

Gasoline in
general

Services of
medical doctors

Insulin

Butter

elasticity
?
1. What is the common statistic of the elastic goods?

2. What is the common statistic of the inelastic goods?

Part II: Direction: Calculate the price elasticity of demand in each of the following examples. In each case say whether the price
elasticity is inelastic or elastic. You will not receive full credit if you do not show your work.
1. The change in demand is 5%; the change in price is 7%
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2. The change in demand is 12%; the change in price is 3%

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3. The change in demand is 9%; the change in price is 4%

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4. The change in demand is 13%; the change in price is 25%

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5. The change in demand is 6%; the change in price is 8%

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