Econ- Section 1 (2) Flashcards
1
Q
Elasticity can also be described as
A
Responsive or sensitive
2
Q
Change of price changes…
A
Quantity Demanded NOT Demand
3
Q
Direction of curve on an increase
A
Right
4
Q
Direction of curve on decrease
A
Left
5
Q
Law of Supply
A
Increase price and quantity supply goes up
6
Q
Unitary Elastic
A
|E| = 1
Raising or lowering price has little effect on TR
7
Q
Elastic
A
|E| > 1
Raise Price: decrease TR
Lower Price: increase TR
8
Q
Inelastic
A
|E| < 1
Raise Price: increase TR
9
Q
3 Factors that affect elasticity
A
Availability of Substitutes
% of consumer’s budget
Time period to make a decision
