Q:

What are examples of elastic and inelastic goods?

A:

Quick Answer

Examples of elastic goods are coffee, airline tickets and stocks. Examples of inelastic goods are water, electricity, and telephone service. The elasticity of a good is the sensitivity of its demand to changes in its price.

Continue Reading

Full Answer

If an increase or decrease in price has little or no effect on the demand for the good, then the good is considered to be highly inelastic. Likewise, if an increase or decrease in price has a dramatic effect on the demand for the good, then the good is considered to be highly elastic. A couple of factors that determine the elasticity of goods include the existence of substitutes and disposable income. If a good has a close substitute, consumers choose to purchase the substitute if the good rises in price. Assuming that a consumer's income level remains the same, if the price of a good rises then so does its opportunity cost, which means that purchasing the same amount of the good as before comes at a higher expense. In situations in which prices are rising and incomes are constant, consumers choose not to purchase luxury goods, such as airline tickets and stocks. Goods such as water and electricity are inelastic because they have an innate biological or sociological demand.

Learn more about Economics
Sources:

Related Questions

  • Q:

    What are some examples of the barter system?

    A:

    Bartering involves exchanging goods or services for other goods and services without involving money. For example, a store owner giving a contractor store credit in exchange for carpentry work is an example of bartering. A baker might bake a cake for his accountant in exchange for services.

    Full Answer >
    Filed Under:
  • Q:

    What are some examples of consumer goods?

    A:

    Consumer goods include household appliances, cleaning products, food, furniture and electronics. The number of consumer goods is potentially infinite and growing, as any good that a person buys for household use or consumption qualifies. Consumer goods are typically categorized as durable or nondurable. Consumer services, which are intangible, are sometimes included under the umbrella of consumer goods.

    Full Answer >
    Filed Under:
  • Q:

    What are examples of capital goods?

    A:

    Some examples of capital goods, which are assets used to produce consumer goods and services, are machine tools, buildings, computers, baggage-handling systems, oil rigs and battleships. In the United States, the capital-goods sector is represented by companies such as Boeing, Caterpillar and Lockheed-Martin. Capital goods, such as conveyor belts, are used to produce consumer goods, such as candy bars.

    Full Answer >
    Filed Under:
  • Q:

    What are the examples of perpetual resources?

    A:

    Examples of perpetual resources include wind energy, solar energy and tidal energy. Perpetual resources are those resources that have rate of use, but they cannot be depleted.

    Full Answer >
    Filed Under:

Explore