Final answer:
Medical services for a badly cut hand are more elastic than a diamond necklace because medical services have more substitutes and represent a larger proportion of a person's income.
Step-by-step explanation:
In economics, the concept of elasticity measures the responsiveness of quantity demanded or supplied to a change in price. Elasticity is determined by the availability of substitutes for the product and the proportion of the consumer's income spent on it. A good or service is considered more elastic if it has many substitutes and if it represents a larger proportion of the consumer's income.
In the case of medical services for a badly cut hand and a diamond necklace, the medical services are more elastic. This is because there are various substitutes for medical services, such as different doctors or hospitals, and the cost of medical services represents a larger proportion of a person's income compared to a diamond necklace. In contrast, a diamond necklace has fewer substitutes, and its price represents a smaller proportion of a person's income.