16.The passage of time increases the elasticity of demand formany goods because:

	time allows price to fluctuate so that consumers will get topick the price they like.
	time allows people to discover more substitutes for goods.
	time allows people to earn more income.
	time allows people to produce more of the goods.

17. If a state decided to place a tax on home heating oil, overtime:

	demand would become more elastic and tax revenue woulddecline.
	demand would become less elastic and tax revenue wouldincrease.
	demand would become more elastic and tax revenue wouldincrease.
	demand would become less elastic and tax revenue woulddecline.

18. Identify the item most likely to be a luxury good among thefour mystery items:

	Item A: price elasticity of demand = -2.3
	Item B: price elasticity of demand = -1.0
	Item C: price elasticity of demand = -0.8
	Item D: price elasticity of demand = -0.2

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