Chapter 19 - Supply/Demand Elasticity

Question 0

price elasticity of demand equation (Ep)

Answer 0

Ep = %Quantity / %Price

Question 1

responsiveness of quantity demanded of a commodity to changes in its price

Answer 1

price elasticity of demand

Question 2

percentage change in quantity demanded is larger than the percentage change in price

Answer 2

elastic demand

Question 3

Ep > 1 means blank

Answer 3

elastic demand

Question 4

percentage change in quantity demanded is smaller than the percentage change in price where Ep < 1

Answer 4

inelastic demand

Question 5

zero elasticity is a blank line

Answer 5

straight vertical

Question 6

perfect elastic line is blank

Answer 6

straight horizontal

Question 7

closer the substitutes and the more substitutes there are, the more blank is demand

Answer 7

elastic

Question 8

the greater the share of the consumer’s total budget spent on a good, the greater is the blank

Answer 8

price elasticity

Question 9

two determinants of price elasticity of demand

Answer 9

existence of substitutes, share of the budget

Question 10

cross price elasticity of demand equation

Answer 10

Exy = % change in amount of good X demanded / % change in price of good Y

Question 11

substitutes would result in a blank cross price elasticity of demand

Answer 11

positive

Question 12

complements would be blank in the cross price elasticity of demand

Answer 12

negative

Question 13

percentage of change in demand for any good holding its price constant, divided by the percentage change of income

Answer 13

income elasticity of demand

Question 14

the responsiveness of the quantity supplied of a commodity to a change in its price

Answer 14

price elasticity of supply

Question 15

price elasticity of supply equation

Answer 15

Es = % delta q supplied / % delta price

Question 16

quantity supplied falls to zero when there is the slightest decrease in price

Answer 16

perfectly inelastic supply