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ECON 2106- Fall 2012 > Chapter 6-Elasticities > Flashcards

Chapter 6-Elasticities Flashcards

1
Q

The price elasticity of demand measures the responsiveness of quantity _____ to a change in price.

A

demanded

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2
Q

The price elasticity of demand is defined as the percentage change in _____ divided by the percentage change in ______.

A

quantity demanded; price

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3
Q

If the price elasticity of demand is elastic, it means the quantity demanded changes by a relatively _____ amount than the price change.

A

larger

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4
Q

If the price elasticity of demand is inelastic, it means the quantity demanded changes by a relatively _____amount than the price change.

A

smaller

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5
Q

A demand curve or a portion of a demand curve can be relatively _____, _____, or relatively _____.

A

elastic; unit elastic; inelastic

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6
Q

For the most part, the price elasticity of demand depends on the availability of _____, the _____ spent on the good, and the amount of _____ people have to adapt to a price change.

A

close substitute; proportion of income; time

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7
Q

The elasticity of demand for a Ford automobile would likely be _____ elastic than the demand for automobiles, because there are more and better substitutes for a certain type of car than for a car itself.

A

more

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8
Q

The smaller the proportion of income spent on a good, the _____ its elasticity of demand.

A

lower

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9
Q

The more time that people have to adapt to a new price change, the _____ the elasticity of demand. The more time that passes, the more time consumers have to find or develop suitable _____ and to plan and implement changes in their patterns of consumptions.

A

greater; substitutes

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10
Q

When demand is price elastic, total revenue will _____ as the price declines because the percentage increase in the _____ is greater than the percentage reduction in price.

A

rise; quantity demanded

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11
Q

When demand is price inelastic, total revenue will _____ as the price declines because the percentage increase in the _____ is less than the percentage reduction in price.

A

fall; quantity demanded

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12
Q

When the price falls on the _____ half of the straight-line demand curve, demand is relatively _____. When the price falls on the lower half of the straight-line demand curve, demand is relatively _____.

A

upper; elastic; inelastic

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13
Q

The cross-price elasticity of demand is defined as the percentage change in the _____ of good A divided by the percentage change in _____ of good B.

A

demand; price

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14
Q

The income elasticity of demand is defined as the percentage change in the _____ by the percentage change in _____.

A

demand; income

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15
Q

The price elasticity of supply measures the sensitivity of the quantity _____ to changes in the price of the good.

A

supplied

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16
Q

The price elasticity of supply is defined as the percentage change in _____ divided by the percentage change in _____.

A

quantity supplied; price

17
Q

Goods with a supply elasticity that is greater than 1 are called relatively _____ in supply.

A

elastic

18
Q

When supply is inelastic, a 1 percent change in the price of a good will induce a _____ 1 percent change in the quantity supplied.

A

less than

19
Q

Time is usually critical in supply elasticities because it is _____ costly for sellers to bring forth and release products in a shorter period of time.

A

more

20
Q

The relative _____ determines the distribution of the tax burden for a good.

A

elasticity of supply and demand

21
Q

If demand is relatively _____ elastic than supply in the relevant region, the largest portion of a tax is paid by the producer.

A

more

22
Q

The measure of the responsiveness of quantity demanded to a change in price.

A

price elasticity of demand

23
Q

When the quantity demanded is greater than the percentage change in price.

A

elastic

24
Q

When the quantity demanded is less than the percentage change in price.

A

inelastic

25
Q

Demand with a price elasticity of 1; the percentage change in quantity demanded is equal to the percentage change in price.

A

unit elastic demand

26
Q

The amount sellers receive for a good or service, calculated as the product price times the quantity sold.

A

total revenue

27
Q

The measure of the impact that a price change of one good will have on the demand of another good.

A

cross-price elasticity of demand

28
Q

The percentage change in demand divided by the percentage change in consumers income.

A

income elasticity of demand

29
Q

The measure of the sensitivity of the quantity supplied to changes in price of a good.

A

price elasticity of supply

ECON 2106- Fall 2012 (8 decks)

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