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Unformatted text preview: elasticity supporting your answer. a. Canned spaghetti: it is an infirior good because it is a less expensive subsitute for food. b. Vacuum cleaners: luxnormal good because elasticity is directly affected by market. c. Used books: infirior because it is a subsiitute for new books. d. Computer software: normal elasticity is dependent on market or could be luxury depending on what it does. 3. Which elasticities are smaller: short-run or long-run? Why? Short run because prices of good decrease more drastically over time. Short-run elasticities are generally smaller (in absolute value) than long-run elasticities because, over a longer time horizon, consumers have greater ability to adjust their behavior and find substitutes for a good. 4. Ch 4 Question 3 5. Ch 4 Question 4 6. Ch 4 Question 11 7. Ch 5 Question 3 8. Ch 5 Question 6 9. Ch 5 Question 10...
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This note was uploaded on 03/25/2010 for the course ECON 202 taught by Professor Guokai during the Spring '07 term at Ole Miss.
- Spring '07
- Income Elasticity