Flashcards
1.2 Elasticity Flashcards
Cards in this deck (23)
- 1ElasticityThe responsiveness of some economic variable when another economic variable changes
- 2Price Elasticity of Demand (PED)The responsiveness of quantity demanded to a change in price
- 3Price ElasticWhen PED > 1 (meaning that the ∆%Qd > ∆%P)
- 4Price Inelastic0 < PED < 1 (When ∆%Qd < ∆%P)
- 5PED = 1Unit Elastic (∆%Qd = ∆%P)
- 6PED = 0Perfectly Inelastic (means that a ∆P leads to NO change in Qd)
- 7PED → ∞Infinitely Elastic (small ∆P → infinitely large ∆Qd)
- 8Calculating PED
- 9Determinants of PED- Number and closeness of available substitutes
- Proportion of income spent on the good
- Time period given to consumers
- Good VS Necessity
- Addictive VS Non-addictive - 10Total RevenuePrice/ Unit • Quantity Sold
- 11Marginal Revenue (MR)The extra revenue from selling one more unit of output
- 12Cross-Price Elasticity of Demand (XED)The responsiveness of demand for one good (x) to a change in the price of another good (y)
- 13SubstitutesXED > 0
- 14ComplementsXED < 0 (Jointly Demanded)
- 15Unrelated GoodsXED = 0
- 16Calculating XED
- 17Income Elasticity of Demand (YED)The responsiveness of demand when consumer income changes
- 18Normal GoodYED > 0
- 19Inferior GoodYED < 0
- 20YED = 0The demand for the good is not affected by a change in income
- 21Calculating YED
- 22Price Elasticity of Supply (PES)The responsiveness of quantity supplied when the price of the good changes
- 23Calculating PES
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- IB Economics (1: Microeconomics) Flashcards on 1.2 Elasticity Flashcards, created by IBMichelle on 16/04/2014.
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