Chapter 3

Question 1

What is the price elasticity of demand?

Answer 1

The price elasticity of demand is the respponsivieness of a product’s quanitity demanded to a change in its price.

Question 2

What is elastic demand?

Answer 2

Elastic demand is the demand for which a percentage change in a product’s price causes a larger percentage change in quanitity demanded.

Question 3

What is inelastic demand?

Answer 3

Inelastic demand is the demand for which a percentage change in a prudct’s price causes a smaller percentage change in quanitity demanded.

Question 4

What is perfectly elastic demand?

Answer 4

Perfecetly elastic demand is the demand for which a product’s price remains constant regardless of quantiity demanded.

Question 5

What is perfectly inelastic demand?

Answer 5

Perfectly inelastic demand is the demand for which a product’s quantity demanded remains constant regardless of price.

Question 6

What is total revenue?

Answer 6

Total reveune is the total revuene earned from a product, calulated by multiping the product’s price by its quanitity demanded.

Question 7

What is unit-elastic demand?

Answer 7

Unit-elastic demand is demand for which a percentage change in price causes an equal change in quanitity demanded.

Question 8

What is income elasticity?

Answer 8

Income elasticity is the responisivness of a product’s quanitity demanded to a change in average consumer income.

Question 9

What is the cross-price elasticity?

Answer 9

The cross-price elasticity is the responsiiveness of a product’s quantitiy demanded to a change in the price of another product.

Question 10

What is price elasticity of supply?

Answer 10

What price elasitcity of supply is the responisveness of a product’s quanitity supplied to a change in price.

Question 11

What is elastic supply?

Answer 11

Elastic supply is the suppy for which a percentage change in a product’s price causes a larger percentage change in quantiity supplied.

Question 12

What is inelastic supply?

Answer 12

Inelastic supply is supply for which the percentage change in a product’s price cases a smaller pcercentage change in quanitity supply.

Question 13

What is the immediate run?

Answer 13

The immediate run is the production period during which none of the resourcees required to make a product can be varied.

Question 14

What is perfectly inelastic supply?

Answer 14

Perfectly inelastic supply is supply for which a product’s quanitity supplied remains constant regardless of price.

Question 15

What is the short run?

Answer 15

The short run is the production period during which at least one of the resources required to make a product cnanot be varied.

Question 16

What is the long run?

Answer 16

The long run is the production period during which all resources required to make a product can be varied and businesses may either enter or leave the industry.

Question 17

What is constant-cost indutstry?

Answer 17

A constant-cost industry is an industry that is not a major user of any single resource.

Question 18

What is perfectly elastic supply?

Answer 18

A perfecetly elastic supply is supply for which a product’s price remains constant, regardless of quanitity supplied.

Question 19

What is increasing cost industry?

Answer 19

An increasing cost industry is an industry that is a major user of at least one resource.