객관식
Which of the following statements is consistent with the elasticities given in Table 5-1, if the table shows that the price elasticity of demand for product X is -2.5 and the income elasticity of demand is 0.8?
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4. Elasticity
Elasticity Summary
Multiple Choice
Economists typically express the elasticity coefficient as an absolute value in order to:
A
focus on the magnitude of responsiveness regardless of direction
B
avoid confusion between price and income elasticity
C
emphasize whether the relationship is positive or negative
D
ensure the coefficient is always greater than one
검증된 단계별 안내1
Understand that elasticity measures the responsiveness of one variable to changes in another, such as quantity demanded to price changes.
Recognize that elasticity coefficients can be positive or negative depending on the relationship (e.g., price elasticity of demand is usually negative because demand falls as price rises).
Note that expressing elasticity as an absolute value means ignoring the sign and focusing only on the size or magnitude of the responsiveness.
This approach helps economists compare how sensitive variables are without getting confused by whether the relationship is positive or negative.
Therefore, the main reason for using the absolute value is to focus on the magnitude of responsiveness regardless of direction.
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