2. In Economics, elasticity is how much supply or demand responds to changes in price

3.  It is elastic if… a small price change leads to a large quantity demanded change  It is inelastic if… any price change leads to a small change in quantity demanded  What are some demand elastic goods/services?  What are some that are inelastic?

4.  Can purchase be delayed?  Are substitutes available?  Does purchase use a large portion of your income? (If yes, then it’s more elastic)

6.  Easier for governments to put taxes on inelastic products (gas, cigarettes)

7.  Inelastic Goods/Services  Salt  0.1  Toothpicks  0.1  Airline travel, short-run  0.1  Gasoline, short-run  0.2  Coffee  0.25  Fish (cod) consumed at home  0.5  Tobacco products, short- run  0.45  Elastic Goods/Services  Restaurant meals  2.3  Foreign travel, long-run  4.0  Airline travel, long-run  2.4  Fresh green peas  2.8  Automobiles, short-run  1.2 - 1.5  Chevrolet automobiles  4.0  Fresh tomatoes  4.6

8.  Determined by: nature of production (complicated = inelastic; easy = elastic) lots of capital involved vs. little amount of skilled labor