Ch. 5 Elasticity

Question 1

Price Elasticity of Demand

Answer 1

Percent Change in Quantity Demanded/ Percent Change in Price

Question 2

Elastic

Answer 2

When absolute value of a percent change is larger than the absolute value of the percent change in price
Abs Value > 1

Question 3

Inelastic

Answer 3

When absolute value of the percent change in quantity is smaller than absolute value of percent change in price
Abs Value < 1

Question 4

Total Revenue

Answer 4

The total amount you receive from buyers
Price x Quantity

Question 5

Cross Price Elasticity of Demand

Answer 5

Percent change in quantity demanded/ Percent change in price of other good

Question 6

Income Elasticity of Demand

Answer 6

Measure of how responsive the demand for a good is to changes in income
Percent change in quantity demanded/ percent change in income

Question 7

Price Elasticity of Supply

Answer 7

Measure in how responsive sellers are to price changes
Percent change in quantity supplied/ Percent change in price