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6-) Please click on the following link to read the article and answer the questions below. “In Dusty Archives, a Theory of Affluence”a. What might you be able to infer about the elasticity of demand from the following statement in the article? (Hint: Answers may vary)”He has documented that several aspects of what might now be called middle-class values changed significantly from the days of hunter gatherer societies to 1800. Work hours increased, literacy and numeracy rose, and the level of interpersonal violence dropped.”Prof. Wade makes the following statement in his article:”After the Industrial Revolution, the gap in living standards between the richest and the poorest countries started to accelerate, from a wealth disparity of about 4 to 1 in 1800 to more than 50 to 1 today. Just as there is no agreed explanation for the Industrial Revolution, economists cannot account well for the divergence between rich and poor nations or they would have better remedies to offer.” b. What impact would you expect this increase in the gap in living standards between the richest and poorest to have on income elasticity today? Briefly discuss.7-) Why is the price elasticity of demand for Coca-Cola greater than price elasticity of demand for soft drinks generally? Briefly discuss.8-) Do you think “a college education” is elastic? or inelastic? Briefly discuss.9-) How can the concept of elasticity be used in real world? Why does it useful?10-) If you are selling “a product”, do you want the product “elastic” or “inelastic”? Why? Briefly discuss.



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