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Category - Economics

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What is an elastic good?
  1. A good that can be produced at many different costs
  2. A good that is valued by many different market segments
  3. A good that can be sold at any price
  4. A good whose demand changes in proportion with the price
Explanation
Answer: D - An elastic good is one whose demand changes in proportion to the price. Demand for inelastic goods does not change when the price changes. Necessities, such as grocery staples tend to be inelastic goods, since people have to eat, while luxuries, such as restaurant meals are more elastic because people can eat out less when their budgets are tighter.
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