Unit 5 Flashcards Preview

Microeconomics Exam #2 > Unit 5 > Flashcards

Flashcards in Unit 5 Deck (11):
1

If |E| > 1

demand is “elastic” and %ΔQ > %ΔP

2

If |E| = 1

demand is “unit elastic” and %ΔQ = %ΔP

3

If |E| < 1

demand is “inelastic” and %ΔQ < %ΔP

4

the more close substitutes there are for a good...

the more elastic (price sensitive) is the demand

5

the more broadly defined the category is...

then the fewer number of substitutes and the more inelastic is the demand

6

the longer the time frame is...

the more time there is to find substitutes, which makes demand more elastic

7

the more of a necessity a good is...

the fewer substitutes it has and the more inelastic is its demand

8

the more of a luxury a good is...

the more substitutes it has, and thus the more elastic is its demand

9

the larger the proportion of your budget spent on a good...

the more elastic (price sensitive) is demand

10

If EXY < 0, then X and Y...

are complements

11

If EXY > 0, then X and Y...

are substitutes