OPENSTAX CH. 5 Flashcards Preview

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Flashcards in OPENSTAX CH. 5 Deck (12):
1

price elasticity

ratio between percent change in Qd or Qs and corresponding change in price

2

three categories of elasticity

elastic, inelastic demand, unitary elasticities

3

elastic demand is when

elasticity greater than one, high response to change in price

4

inelastic demand is when

elasticity is less than one, low responsiveness to price changes

5

price elastiticies of demand are ALWAYS

negative

6

when elasticity is 0 what is it

infitnite, constant unitary elasticity

7

infinite elasticity aka

perfect elasticity

8

infinite elasticity

extreme case where Qd, Qs, changes by infiite amt in response to any chang ein price at all- s/d curve horizontal

9

constant unitary elasticity

price change of one results in qty change of 1%

10

tax incidence

analysis/manner of how burden of a tax is divided between consumers and producers

11

demand is more inelastic than supply equals

consumers bear most of tax burden

12

supply more inelastic than demand equals

sellers bear most of tax burden