elasticity of demand from cfa mock

CFA Level I Economics
#1

Demand for a good is most likely to be more elastic when:

the good is a necessity. the adjustment to a price change takes a longer time. a lesser proportion of income is spent on the good. Incorrect.

The more time that has elapsed since a price change, the more elastic the demand. For example, if gas prices rise, consumers cannot quickly change their mode of transportation but will likely do so in the longer run.

CFA Level I

“Demand and Supply Analysis: Introduction,” Richard V. Eastin and Gary L. Arbogast

Section 4.2

I don’t get it. Why is b the answer? If it takes longer for people to adjust, then it would be LESS elastic in the short term…

#2

something feels similar

http://www.analystforum.com/forums/cfa-forums/cfa-level-i-forum/91326195

#3

Thanks buddy

#4

Yeah, I believe it should be “longer timeframe” in view of elasticity. AKA, oil prices go up, over the long run more choices (Alternative, better MPG, etc) so it is more elastic with time.

The others are dead give aways though. Think about toothpaste, if the price goes up 20 cents, do you really care? Healthcare is a nessicity, your alternative is become less healhty. Hence if I got this question, process of elimination would lead to B haha.