Make a list of goods and services that you and your family consider to be elastic.
Make a list of goods and services that you and your family consider to be inelastic.
Research a time when an inelastic good or service was dramatically affected by either scarcity
or oversupply and write about it. What does your example demonstrate about inelasticity of
demand?
Finally, consider income elasticity for your own individual or family’s situation. What kind of
decisions are made based on this economic theory? Now that you understand the theory try
to identify inferior goods and normal goods that are purchased. Write a paragraph describing
your observations. Note: you can only observe the here and now, but for income elasticity, you
may need to talk with your family to discover income elasticity over time. For example,
perhaps your parents’ income increased over the past 10 years. Consider how this has
changed the products and services you consume.