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Flashcards

6. Elasticity

samstevenson2014 Economics Leaving Cert Inglês 24 flashcards

Flashcards do conjunto (24)

  1. 1State and explain PEDPrice Elasticity of Demand
    How much demand for a good changes in response to change in price charged
  2. 2If answer for PED is negative...Good obeys Law of Demand
  3. 3If positive...It doesn't obey Law of Demand
  4. 4PED =0Perfectly inelastic (demand constant)
  5. 5PED <1Relatively inelastic
    (less than 1% fall in demand for each 1% increase in price)
  6. 6PED =1Unit elastic (Equal)
  7. 7PED >1Relatively elastic
    (more than 1% fall in demand for every 1% drop in price)
  8. 8PED = infinityPerfectly elastic
    (Tiny change in price leads to 100% fall in demand)
  9. 92 factors affecting PEDIncome
    Durability
    Loyalty
    Degree of necessity
    Time
  10. 10State and explain YEDIncome elasticity of demand
    Degree to which demand for good changes in response to change in consumer's income.
  11. 11Answer positive for...normal goods
  12. 12Answer negative for...inferior goods
  13. 13Normal good with YED <1 is a...Necessity
    (1% increase in income causes less than 1% increase in demand)
  14. 14Normal good with YED >1 is a...Luxury
    (1% increase in income causes greater than 1% increase in demand)
  15. 15YED <0Inferior good
    (1% increase in income causes decrease in demand)
  16. 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
  17. 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
  18. 18CED >0 is a..Substitute good
  19. 19CED <0 is a...Complimentary good
    (joint demand)
  20. 20= 0No relationship
    e.g. chocolate and jeans
  21. 21State and explain PESPrice Elasticity of Supply
    Degree to which supply of good changes in response to change in price offered for the good
  22. 22Answer will normally be......positive
  23. 23Bigger the answer......more elastic the supply
  24. 24If PES = 0Product is perfectly elastic (fixed supply)

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Leaving Cert Economics (Micro Flashcards) FlashCards sobre 6. Elasticity, criado por samstevenson2014 em 19-04-2015.
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