Reading...
Play button
Play button
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
|
Difference Between Elastic, Inelastic And Unitary Elastic
|
Elastic – has substitutes (orange juice)
Inelastic – necessity (MD services) Unitary – both (gas) |
|
|
Other Factors Determining Elasticity Of Demand
|
- number of substitutes available
- Percent of income - Product is perceived by consumer - Time factor |
|
|
Elasticity Of Supply
|
How responsive seller are to a given % change in the market
|
|
|
Other Factors Determining Elasticity Of Supply
|
Time. S becomes more elastic over time
Longer the time period the easier it is to adjust |
|
|
39. What Is Income Elasticity Of Demand In Terms Of Normal And Inferior Goods?
|
Idea/Computation:
When Incomes increase, how responsive are consumers in their purchases of various goods (normal or inferior)? Larger % change – elastic Smaller % change – inelastic |
|
|
(UTILITY) Total
|
satisfaction from all units bought
|
|
|
(UTILITY) Marginal
|
addition satisfaction of each addition wants bought
|
|
|
Utility
|
the measure of satisfaction from buying a product.
|
|
|
Maximizing
|
marginal utility (a)/utility (b)
|
|
|
42. Law Of Diminishing Marginal Utility
|
Buy more units the marginal utility decreases
Ex. Eat more pizza you satisfaction goes down |
|
|
Stagflation
|
high unemployment
|
|
|
(Measuring Income Elasticity Of Demand)
If Ey is positive (even a decimal), or > 0 |
the good is a normal good. (Purchases increase when Y increases).
|
|
|
(Measuring Income Elasticity Of Demand)
If Ey is negative, or < 0, |
the good is an inferior good. (Purchases decrease when Y increases)
|
|
|
(Measuring Income Elasticity Of Demand)
If Ey is equal, or = 0, |
(Purchases increase when Y increases)
|
|
|
What Are The Basic Assumptions of A Production Possibilities Curve?
|
1) Resources are limited.
2) they are trying to maintain full employement and full production as an econ. goal. 3) they have a constant state of technology. 4) they can produce two types of products only (manufactured goods and agriculture crops). 5) They can produce a maximum of 10 Mfg. Goods OR 4 Agr. Crops, or some combination of both. |
