Can someone look at the answer for these?
After paying an economist to estimate the price elasticity of demand for socks, sock manufacturers, expecting to increase revenues, decide to reduce the price of socks. The estimate of demand elasticity could have been:
a) .75
b) .25
c) .5
d) 1.75
e) -.75
My answer was D
Which of the following goods would you expect to have the largest income elasticity of demand?
a) toothpaste
b) newspapers
c) rice
d) stereo equipment
My answer was D
If the price elasticity of demand for some good is estimated to be 4, then a 1% increase in price will lead to a:
a) 0.25% decrease in quantity demanded
b) 4% decrease in quantity demanded
c) 4% increase in quantity demanded
d) 0.5% increase in quantity demanded
e) 20% increase in quantity demanded
My answer was B
And I don't understand this last question please help.
Why would demand for oxygen be more inelastic than demand for caviar (assuming that you have to buy both goods in order to have them)?