CHAPTER STUDENT ACTIVITY 4 Analyzing Elasticity of Demand 4 SECTION 3 Some of the goods and services people consume are daily expenses, while others are things people spend money on only occasionally. Some have no adequate or available substitutes; others have many. Some goods are necessities-things people must have- and others are luxuries that meet wants, not needs. All these factors can have an effect on whether the price of a good or service is elastic or inelastic for a consumer. The chart below lists several commonly purchased goods and services. O Fill in the chart by identifying any substitutes consumers might choose to replace the good or service, indicating whether you think the original good or service is a necessity or a luxury. Then, sta whether you think demand for the good or service is elastic or inelastic. Finally, use the last column to explain why you rate demand as elastic or inelastic. Necessity Elastic or Good or Service Substitutes Explanation or Luxury Inelastic 1. Breakfast sandwich 2. Drinking water 3. MP3 player 4. Gold necklace 5. Hair cut 6. Band uniform for band member 7. Cellphone