Sample 3

IB Economics: Sample 3

1. (a) Explain two reasons why the demand for primary goods might be price inelastic. [10]Student answerPrimary good are the ones that are grown or taken from the ground such as oranges that are harvested. Price elasticity of demand is the responsiveness of quantity demanded to a change in the price of a good in an economy when the price increases or decreases. It is measured by the equation -% change in Qd / % change...

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