Question

Read the attached file

Answer 1

Answer:

1)

A good without any good substitutes is likely to have a relatively low elasticity of demand. Low elasticity of demand means that consumers cannot replace the good with substitutes when the price goes up.

2)

The yacht is likely to have the more elastic demand because it is a luxury good that people can easily forgo in case they do not have enough income. An amputation procedure for a diabetic on the other hand, is a medical issue that is will have an extremely inelastic demand. In other words, patients will pay any necessary amount for the procedure, because it is vital for their lives.

3)

Food as a whole will be the least elastic because people cannot go without food, and it is one of the most basic necessities that need to be covered.

Vegetables will be in between. They are one essential food group, but they could be replaced in some cases.

Red bell peppers is the most elastic good because it is akin to a luxury good in the sense that is not objectively necessary to consume for anything other than flavor, and as a spice, it has many close substitutes.

4)

The demand for natural gas will tend to be less elastic in the short run than in the long run. In the short-run, people will have to continue buying natural gas even if the price rises, but in the long-run, many people will opt for other alternatives like electric cars.