Econ 300 Chapters 2-3

Front 1

Elasticity of demand

Back 1

E = %change Qd/ (%change in P) = (dQ/dP)*(P/Q)

0<|E|<1 = inelastic
|E| = unit elastic
1<|E|<infinite = elastic

Front 2

Elasticity of supply

Back 2

n = %change Qs/ (%change in P) = (dQs/dP)*(P/Qs)

0<|E|<1 = inelastic
|E| = unit elastic
1<|E|<infinite = elastic

Front 3

Relative tax burden

Back 3

change in P/(tax - change in P)

n=(dQs/dP)*(P/Qs)
E=(dQ/dP)*(P/Q)

n/(-E)

Front 4

Income elasticity

Back 4

%change in Q/%change in Y=(dQ/dY)*(Y/Q)

Front 5

Cross Price elasticty

Back 5

E(x,y) = %change in Qx/% change in Py
= (dQx/dPy)*(Py/Qx)

E(x, y) > 0 = substitutes
E(x, y) < 0 = compliments
E(x, y) = 0 => no relation

Front 6

Mathematically what is a compliment and a substitute?

Back 6

dQx/dPy=negative (compliment)
dQx/dPy= positive (substitute)

Front 7

Mathematically what is a normal good vs. an inferior good?

Back 7

dQ/dY=negative (inferior good)
dQ/dY=positive (normal good)