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;
11 Cards in this Set
- Front
- Back
|
Elasticity
|
A measure of how much one economic variable responds to changes in another economic variable.
|
|
|
Price elasticity of Demand
|
The responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product's price.
|
|
|
Elastic Demand
|
Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price, so the price elasticity is greater than 1 in absolute value.
|
|
|
Inelastic Demand
|
Demand is inelastic when the percentage chane in quantity demanded is less than the percentage change in price, so the price elasticity is less than 1 in absolute value.
|
|
|
Unit-elastic demand
|
Demand is unit elastic when the percentage change in quantity demanded is equal to the percentage change in price, so the price elasticity is equal to 1 in absolute value.
|
|
|
Perfectly inelastic demand
|
The case where the quantity demanded is completely unresponsive to price, and the price elasticity of demand equals zero.
|
|
|
Perfectly elastic demand
|
The case where the quantity demanded is infinitely responsive to price, and the price elasticity of demand equals infinity.
|
|
|
Total revenue
|
The total amount of funds received by a seller of a good or service, calculated by multiplying price per unit by the number of units sold
|
|
|
Cross-price elasticity of demand
|
The percentage change in quantity demanded of one good divided by the percentage change in the price of another good.
|
|
|
Income elasticity of demand
|
A measure of the responsiveness of quantity demanded to changes in income, measured by the percentage change in quantity demanded divided by the percentage change in income.
|
|
|
Price elasticity of supply
|
The responsiveness of the quantity supplied to a change in price, measured by dividing the percentage change in the quantity supplied of a product by the percentage change in the product's price
|
