Question

intro to economics test
which of the following is an example of a product with elastic demand?
○ insulin
● electricity
○ hawaiian vacation
○ water

Explanation:

Elastic demand means the quantity demanded is highly responsive to price changes. Insulin is a necessity for diabetics (inelastic). Water and electricity are often considered necessities with relatively inelastic demand (though electricity can have some elasticity, but Hawaiian vacation is a luxury/non - essential good. If its price rises, people can easily postpone or cancel it, so demand is elastic. The original selected option (electricity) is incorrect.

Answer:

C. Hawaiian vacation