Of the following, which is the best example of good with a perfectly inelastic demand?
A) the demand for gasoline
B) the demand for tickets in New York City when the Mets or Yankees are in the World Series
C) the demand for a college education by a student who has a full scholarship to an Ivy League school
D) a diabetic's demand for insulin
D
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Which of the following statements is true?
A) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in quantity demanded. B) If demand increases and supply decreases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. C) An increase in demand causes an increase in equilibrium price; the increase in price causes supply to increase. D) If both demand and supply decrease, there must be a decrease in equilibrium price; equilibrium quantity may either increase or decrease.
When John earned $65,000 he purchased 10 DVDs a year. His income has just increased to $68,000 and he plans to purchase 15 DVDs this year. John's income elasticity of demand equals
A) 0. B) 0.11. C) 1.67. D) 8.87.