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Flashcards in Week 3 Deck (21):
1

Elasticity

A measure of the responsiveness of quality demanded or quantity supplied to one of its determinants

2

A measure of the responsiveness of quality demanded or quantity supplied to one of its determinants

Elasticity

3

Price elasticity of demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, calculated as the percentage change in quantity demanded divided by the percentage change in price.
(%∆Q/%∆P)

4

A measure of how much the quantity demanded of a good responds to a change in the price of that good, calculated as the percentage change in quantity demanded divided by the percentage change in price.
(%∆Q/%∆P)

Price elasticity of demand

5

Elastic (Demand curve)

When elasticity is greater than 1. Quantity moves proportionately more than the price.

6

When elasticity is greater than 1. Quantity moves proportionately more than the price.

Elastic (Demand curve)

7

Inelastic (Demand curve)

When elasticity is less than 1. Quantity moves proportionately less than the price.

8

When elasticity is less than 1. Quantity moves proportionately less than the price.

Inelastic (Demand curve)

9

Unit elasticity (Demand curve)

When elasticity is exactly 1. Quantity moves the same amount proportionately as price.

10

When elasticity is exactly 1. Quantity moves the same amount proportionately as price.

Unit elasticity (Demand curve)

11

Perfectly inelastic

When there is zero elasticity. The demand curve is vertical.

12

When there is zero elasticity. The demand curve is vertical.

Perfectly inelastic

13

Perfectly elastic

The price elasticity of demand approaches infinity and the demand curve becomes horizontal.

14

Total revenue (in a market)

The amount paid by buyers and received by sellers of a good, calculated as the price of the good times the quantity sold.

15

The amount paid by buyers and received by sellers of a good, calculated as the price of the good times the quantity sold.

Total revenue (in a market)

16

Income elasticity of demand

A measure of how much the quantity demanded of a good responds to a change in consumers’ income, calculated as the percentage change in quantity demanded divided by the percentage change in income.

17

A measure of how much the quantity demanded of a good responds to a change in consumers’ income, calculated as the percentage change in quantity demanded divided by the percentage change in income.

Income elasticity of demand

18

Cross-price elasticity of demand

A measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good.

19

A measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good.

Cross-price elasticity of demand

20

Price elasticity of supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, calculated as the percentage change in quantity supplied divided by the percentage change in price.

21

A measure of how much the quantity supplied of a good responds to a change in the price of that good, calculated as the percentage change in quantity supplied divided by the percentage change in price.

Price elasticity of supply