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
|
Arc elasticity |
a measure of elasticity between two distinct points on a demand curve |
|
|
Cross-price elasticity |
a measure of the response of consumption of a good or service to changes in the price of another good or service to changes in the price of another good or service it is defined as the percentage change in the quantity of good a to the quantity of good b |
|
|
Elastic |
a demand or supply curve is said to be elastic if the percentage change in quantity is greater than a given percentage change in price. The flatter the curve, the more elastic it is. |
|
|
Income elasticity |
a measure of the relative response of demand to income changes. it is defined as the percentage change in the quantity demanded divided by the percentage change in the income. |
|
|
Inelastic |
percentage change in quantity is less than percent of price. |
|
|
Inelastic demand |
the inelastic nature of the demand curve for raw agricultural products, when combined with a bumper crop and rising imports, drives down the price of these commodities. Revenue falls sharply because of steepness of the demand curve. |
|
|
Independent goods |
goods whose consumpition is independent from the consumption of goods, ie toothpaste and milk. |
|
|
inferior good |
goods for which consumption falls when income increases |
|
|
Luxuries |
normal goods with a income elsticity greater than 1 |
|
|
Neccessity |
normal goods whose income elasticity is less than one. |
|
|
Own-price elasticity of demand |
a measure of the relative responseof consumption of a good or service, to changes in price. it is defined as the percentage change in price. |
|
|
Perfectly elastic demand |
a perfectly elastic (inelastic) demand curve is paralell (perpindicular) to the horizontal or quantity axis. |
|
|
perfectly inelastic demand |
a perfectly inelastic demand curve is perpindicular to the horizontal or quantity access. |
|
|
point elasticity |
a measure of elasticity at a given point on a demand curve |
|
|
Unitary elastistic |
the demand curve is unitary elastic where the percentage change in quantity is identical to that in price. |
