Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
15 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
ratio of the percent change in the quantity demanded to the percent change in the price as we move along the demand curve (dropping the minus sign) |
Price of Elasticity of demand |
|
|
|
Technique for calculating the percent change. In this approach, we calculate changes in a variable compared with the average, or midpoint, of the starting and final values. |
Midpoint method |
|
|
|
When the quantity demanded does not respond at all to changes in the price. |
Perfectly inelastic |
The demand curve is a vertical line. |
|
|
When any price increase will cause the quantity demanded to drop to zero. |
Perfectly elastic |
demand curve is a horizontal line |
|
|
if the price elasticity of demand is greater than 1 |
Elastic demand |
|
|
|
if the price elasticity of demand is less than 1 |
Inelastic demand |
|
|
|
If the price of elasticity of demand is exactly 1 |
Unit-Elastic Demand |
|
|
|
the total value of sales of a good or service. It is equal to the price multiplied by the quantity sold |
Total Revenue |
|
|
|
between two goods measures the effect of the change in one good's price on the quantity demanded of the other good. It is equal to the percent change in the quantity demanded of one good divided by the percent change in the other good's price. |
Cross-price elasticity of demand |
|
|
|
the percent change in the quantity of a good demanded when a consumer's income changes divided by the percent change in the consumer's income. |
Income elasticity of demand |
|
|
|
When the income elasticity of demand for that good is greater than 1 |
Income-elastic |
|
|
|
When the income elasticity of demand for that good is positive but less than 1 |
Income-inelastic |
|
|
|
A measure of the responsiveness of the quantity of a good supplied to the price of that good. It is the ratio supplied to the percent change in the quantity supplied to the percent change in the price as we move along the supply curve. |
Price Elasticity of supply |
|
|
|
When the price elasticity of supply is zero, so that changes in the price of the good have no effect on the quantity supplied. |
Perfectly inelastic supply |
is a vertical line. |
|
|
When even a tiny increase or reduction in the price will lead to very large changes in the quantity supplied, so that the price elasticity of supply is infinite. |
Perfectly elastic supply |
supply curve is a horizontal line. |
