When can an elasticity be calculated ?

Define elasticity

If a 5% increase in price were to cause firms to increase supply more than proportionately (by 10%) than supply would be what ?

If the response to a change in price were less than proportionate (increase in supply of only 3% from a 5% increase in price) supply would be what ?

If the change in price were to induce an exactly proportionate change in supply, supply would be what ?

How is elasticity useful ?

What are the 4 main elasticities ?

What is the formula to calculate price elasticity of demand ?

What is the formula for price elasticity of supply.

What is the formula for the income elasticity of demand ?

What is the formula for cross-elasticity of demand for good A with respect to the price of good B ?

Define price elasticity of demand

What is the simple rule used to determine the general nature of elasticity between any two points on the demand curve ?

Explain what happens to elasticity as you move down a negatively sloping linear demand curve

What is rectangular hyperbola ?

Explain what happens to elasticity on a non-linear demand curve

Horizontal and vertical demand curves have what type of elasticities ?

What is the elasticity of a horizontal demand curve like ?

What is the elasticity of a vertical demand curve like ?

How do mathematicians draw demand and supply curves ?
What is the effect on elasticity ?

All elasticities above 1 are what ?

On a negative sloping demand curve, what is elasticity ?

What do economists do with the minus sign of elasticity ?

Most of the elasticity statisitics for the demand for cigarettes are between 0 and 1. Discuss the significance of this for governments.

If PED is greater than 1, the good is price ?

Give an example of PED higher than 1

Draw an elastic demand curve

If PED is less than 1, the good is what ?

If there is a 20% increase in price and a 5% fall in QTY demanded, the price elasticity of demand is what ?

If PED is equal to 1, the good is what ?

IF PED is equal to 0, the the good is what ?

if PED is infinity, the good is what ?

A good with a PED of 0 is associated with what?

Draw a relatively inelastic demand curve

What are the main factors determining the price elasticiy of demand ?

Explain how substitutability determines the price elasticiy of demand

Explain how the % of income can determine price elasticity of demand

Explain how necessities and luxuries can affect the price elasticity of demand

Explain how the width of the market definition can affect the price elasticity of demand

Explain how time can determine the price elasticity of demand

Give an example of how time can determine the price elasticity of demand

Define price elasticity of supply

A rise in price causes firms to respond how ?

The key note of supply curve is not the slope but what ?

If the supply curve intersects the price axis, the curve is what at all points ?

If the supply curve intersects the QTY axis, the curve is what at all points ?

If the supply curve passes through the origin, elasticity is what ?

Describe the properties of elasticity on a non-linear supply curve

What is the difference between perfectly elastic demand and perfectly inelastic supply?

What is the impact of UK households having an income elasticity of demand for housing exceeding +1, demand for housing being price inelastic and low price elasticity of supply for housing ?

What generally needs to happen for supply of housing to equal demand in the long term ?

What are the main factors determining the price elasticity of supply ?

Explain how the length of the production period affects the elasticity of supply

Explain how the availability of spare capacity can affect the price elasticity of supply
(When is the supply most elastic ?)

Explain how the ease of accumulating stocks can affect price elasticity of supply

Explain how the ease of switching between alternative methods of production affects the price elasticity of supply

Explain how the number of firms in the market and the ease of entering the market can affect price elasticity of supply

Explain how Time can affect the price elasticity of supply

Explain market period supply

Explain short-run supply

Explain long-run supply

In a competitive industry with low or non-existent barriers to entry, what is elasticity of supply like in the long run and short run ?
Why ?

Define income elasticity of demand

The nature of income elasticity of demand depends on what 2 things ?

What is income elasticity of demand always like for an inferior good and a positive good ?

As income increases, a higher quantity is demanded for what type of good ?

Normal goods can be divided into what goods?

Explain how demand changes for basic goods and superior goods as income rises

Define cross-elasticity of demand

The cross-elasticity of demand between 2 goods or services indicates the nature of what ?

What are the 3 possibilities for goods with a cross-elasticity of demand ?

Complementary goods have what cross-elasticity of demand ?

What is the cross-elasticity of demand between 2 goods which are substitutes like ?

Explain the idea of 'no discernible demand relationship'

A firms ability to increase the price charged to customers by the full amount of a tax imposed on their good depends on what ?

When demand is relatively elastic, consumer resistance means what happens with the tax ?

The tax per unit is measured by what on the D/S diagram ?

What is the effect of an imposed tax when demand is elastic ?

When firms increase the price, passing all the tax onto consumers, what is the consequence ?

In a new equilibrium where price has fallen to remove excess supply after trying to pass ALL of the tax onto consumers, what is the impact ?

When demand is relatively elastic, the new equilibrium where consumers only pay part of the tax amounts to less than what of the tax ?

What is a shifted incidence of the tax ?

What is unshifted incidence ?

Total tax revenue paid by firms to the government is shown by what on an D/S diagram ?

How does a firm's ability to pass the incidence of tax on to consumers as a price rise change with completely inelastic demand and perfectly elastic demand ?

What is the effect of an increase in income tax on the demand curve for a normal good and an inferior good ?

What is the effect of subsidies on the supply curve ?

The extent to which price or output changes following a shift of demand or supply depends on what ?

With an elastic supply curve, an outward shift in demand causes what ?

Where the supply curve is inelastic , what is the effect of an outward shift in demand ?

The extent to which the good's price or equilibrium level of output changes depends on what ?

Explain how price elasticity of demand affects total consumer spending when a good's price changes (12 marks)

Explain how the price elasticity of supply of new housing has affected UK house prices in recent decades

Evaluate the view that the ability of firms to exploit their customers depends on the price elasticity of demand for their products (25 marks)

'When demand is elastic, taxing a good can succeed in switching consumer expenditure away from the good; it is less successful at raising revenue for the government' Evaluate this view (25 marks)