Determinants of Price Elasticity?

Question

A worker loses his job when a local factory closes. He is 30, owns a home, has two children, and a wife who works full time. He is considering taking classes at a local community college to retrain for a job in the health care field. Would his demand for college classes be price elastic or inelastic based on the determinants of price elasticity?

Answer 1

It will be relatively elastic because his income is limited and family is big. Though depends on his accumulated wealth and initial price they will charge.

Answer 2

Price inelastic.

Given the income, he has to maximize his utility. For his indifference curves, not taking the classes has a big opportunity cost (the salary he will get). So, he will prefer to consume less of all the other goods and go to college.

Based on the determinants of Price Elasticity, college has not substitutes, is a necessity item (because he is unemployed) and the price of college as a proportion of his disposable income is not very large (since it is a local community college).

I hope this helps