Review
5. From the following quotations, what, if anything, can you
conclude about elasticity of demand?
a. “Good weather resulted in record wheat harvests and
sent wheat prices tumbling. The result has been
disastrous for many wheat farmers.”
b. “Ridership always went up when bus fares came down,
but the increased patronage never was enough to prevent
a decrease in overall revenue.”
c. “As the price of cellphones fell, producers found their
revenues soaring.”
d. “Coffee to me is an essential good—I’ve just gotta have it
no matter what the price.”
e. “The soaring price of condominiums does little to curb
the strong demand in Vancouver.”
6. What would you predict about the relative price elasticity of
demand for each of the following items? Explain your reasoning.
a. food
b. vegetables
c. leafy vegetables
d. leafy vegetables sold at your local supermarket
e. leafy vegetables sold at your local supermarket on
Wednesdays