The own-price elasticity of demand for frozen yogurt is -2.0. The own-price elasticity of supply for frozen yogurt is +0.6. The demand for frozen yogurt would be considered __________. The supply of frozen yogurt would be considered __________.

Hint: remember to take the absolute value.

Question

The own-price elasticity of demand for frozen yogurt is -2.0. The own-price elasticity of supply for frozen yogurt is +0.6. The demand for frozen yogurt would be considered __________. The supply of frozen yogurt would be considered __________.

Hint: remember to take the absolute value.

BlackTom AI · Accepted Answer

The question presents the own-price elasticities: demand = -2.0 and supply = +0.6 for frozen yogurt, and asks us to classify each as elastic or inelastic using the absolute values. Remember that the magnitude matters: if |elasticity| > 1, demand or supply is elastic; if |elasticity| < 1, it is inelastic. Option A: "Inelastic; Inelastic". For demand, | -2.0 | = 2, which is greater than 1, so demand is elastic, not inelastic. This makes this option incorrect for the first part. Since the first part is already incorrect, the second part (supply) is moot, but note that supply has |0.6| = 0.6 < 1, which would be inelastic, so the second part would be inelastic if evaluated alone. However, the overall pairing here does not match the actual classifications because the demand part is wrong. Option B: "Elastic; Elastic". The demand side is indeed elastic since | -2.0 | = 2 > 1, but the supply side is not elastic; |0.6| = 0.6 < 1, which makes supply inelastic. Thus this option incorrectly labels the supply as elastic. Option C: "Elastic; Inelastic". This option matches the correct reasoning: demand has | -2.0 | = 2 > 1, so demand is elastic; supply has |0.6| = 0.6 < 1, so supply is inelastic. This pairing is consistent with the given magnitudes and the rule about absolute values. Option D: "Inelastic; Elastic". This would imply both a misclassification of demand as inelastic (which is incorrect since demand is elastic) and misclassification of supply as elastic (also incorrect since supply is inelastic). The combination here contradicts both magnitudes. In summary, each option is evaluated by comparing the absolute value of the elasticity to 1. The demand elasticity of 2 in magnitude indicates elastic demand, while the supply elasticity of 0.6 in magnitude indicates inelastic supply. The only option that consistently reflects these classifications is Option C.

econ_102_120251_245625 Week 06 Quiz

The own-price elasticity of demand for frozen yogurt is -2.0. The own-price elasticity of supply for frozen yogurt is +0.6. The demand for frozen yogurt would be considered . The supply of frozen yogurt would be considered . Hint: remember to take the absolute value.

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