Karteikarten
6. Elasticity
Karten in diesem Stapel (24)
- 1State and explain PEDPrice Elasticity of Demand
How much demand for a good changes in response to change in price charged - 2If answer for PED is negative...Good obeys Law of Demand
- 3If positive...It doesn't obey Law of Demand
- 4PED =0Perfectly inelastic (demand constant)
- 5PED <1Relatively inelastic
(less than 1% fall in demand for each 1% increase in price) - 6PED =1Unit elastic (Equal)
- 7PED >1Relatively elastic
(more than 1% fall in demand for every 1% drop in price) - 8PED = infinityPerfectly elastic
(Tiny change in price leads to 100% fall in demand) - 92 factors affecting PEDIncome
Durability
Loyalty
Degree of necessity
Time - 10State and explain YEDIncome elasticity of demand
Degree to which demand for good changes in response to change in consumer's income. - 11Answer positive for...normal goods
- 12Answer negative for...inferior goods
- 13Normal good with YED <1 is a...Necessity
(1% increase in income causes less than 1% increase in demand) - 14Normal good with YED >1 is a...Luxury
(1% increase in income causes greater than 1% increase in demand) - 15YED <0Inferior good
(1% increase in income causes decrease in demand) - 16State and explain CEDCross price elasticity of demand
Degree to which demand for Good A changes in response to change in price of Good B - 17What are: PB1 PB2 QA1 QA2Before price of Good B
After price of Good B
Before quantity of Good A
After quantity of Good A - 18CED >0 is a..Substitute good
- 19CED <0 is a...Complimentary good
(joint demand) - 20= 0No relationship
e.g. chocolate and jeans - 21State and explain PESPrice Elasticity of Supply
Degree to which supply of good changes in response to change in price offered for the good - 22Answer will normally be......positive
- 23Bigger the answer......more elastic the supply
- 24If PES = 0Product is perfectly elastic (fixed supply)
Informationen
- Beschreibung
- Leaving Cert Economics (Micro Flashcards) Karteikarten am 6. Elasticity, erstellt von samstevenson2014 am 19/04/2015.
- Erstellt von
- samstevenson2014
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