Elasticity

Question 1

• an economic concept that measures responsiveness of one variable to changes in another variable

Answer 1

Elasticity

Question 2

• important in making policies on tax and pricing for it measures the
  effect of demand and supply on changes in price

Answer 2

Elasticity

Question 3

ratio between the percentage change in the quantity
demanded or supplied and corresponding percent change in price.

Answer 3

Price elasticity

Question 4

percentage change in the quantity
demanded of a good or service divided by the percentage change in
the price.

Answer 4

Price elasticity of demand

Question 5

the percentage change in quantity supplied
divided by the percentage change in price

Answer 5

Price elasticity of supply

Question 6

• is one in which the elasticity is greater than one,
  indicating responsiveness to changes in price

Answer 6

Elastic demand/supply

Question 7

more than 1

Answer 7

Elastic demand/supply

Question 8

Flatter

Answer 8

Elastic demand/supply

Question 9

• elasticity that are less than one and indicate low
  responsiveness to price changes

Answer 9

Inelastic demand/supply

Question 10

less than 1

Answer 10

Inelastic demand/supply

Question 11

Steeper

Answer 11

Inelastic demand/supply

Question 12

• indicate proportional responsiveness of either demand or
  supply

Answer 12

Unitary Elasticities

Question 13

Equal

Answer 13

Unitary Elasticities

Question 14

extreme case where either the Quantity
Demanded (Qd) or supplied (Qs) changes by an infinite amount in responds to any change in price at all.

Answer 14

Infinite elasticity or perfect elasticity

Question 15

refers to the extreme case in which
percentage change in price no matter how large, results in zero change in
quantity.

Answer 15

Zero elasticity or perfect inelasticity

Question 16

occurs when a price change of one percent results in
a quantity change of one percent

Answer 16

Constant Unitary Elasticity

Question 17

is price times the quantity sold

Answer 17

total revenue

Question 18

• Price to sales
  -Demand Price sensitive
  -maraming choices, competition

Answer 18

Demand Elastic

Question 19

• Restaurant Cafes

Answer 19

Demand Elastic

Question 20

• Few Choices
• Demand is not price sensitive
• necessities

Answer 20

Demand Inelastic

Question 21

-Pharmacy; Agricultural goods, electricity

Answer 21

Demand Inelastic

Question 22

• Price to Inventory
• maraming alternative
• business is easier to establish
• less regulation
• less capitalization

Answer 22

Supply Elastic

Question 23

Farming

Answer 23

Supply Elastic

Question 24

• Expertise to establish
• business is harder to establish
• more capitalization requirements
• more regulation

Answer 24

Supply Inelastic

Question 25

Banks

Answer 25

Supply Inelastic