Question

Elasticity measures the behavioral response of economic agents in a given situation.

Which of the following questions is likely to be answered using elasticity?

a)If a business raises it prices, will that have a large or small on demand?

b) If you get a pay raise, are you more productive at work?

c)If hot dogs go on sale, will it be sunny day?

Answer 1

Answer:

The correct answer is letter "A": If a business raises it prices, will that have a large or small on demand?

Explanation:

Elasticity is a measure of a variables' reaction to a change in another variable. It can describe the extent to which the supply or demand for a good or service changes with the price of goods or consumer income. When an item has many possible substitutes, its demand will be more elastic.