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Economics Unit 1 > Elasticities > Flashcards

Elasticities Flashcards

1
Q

YED shows…

A

how demand changes with income

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2
Q

XED shows…

A

the change in price of one good affects the demand for another good

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3
Q

PES shows…

A

how supply changes with price

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4
Q

Perfectly inelastic…

A

0
Price change has no effect on demand
Firms total revenue falls

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5
Q

Price inelastic…

A

Between 0 and -1
Relatively responsive
Total revenue falls

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6
Q

Unitary price elasticity…

A

1
Price changes has same proportionate change
Total revenue remains the same

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7
Q

Price elastic…

A

Above 1
A fall in price, demand rises by proportionately more than price cut
Total revenue rises

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8
Q

Perfectly elastic…

A

Infinity
A fall in price, infinite level of demand
Huge increases in total revenue

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9
Q

Calculation formulas are generally…

A

% change in quantity demanded or supplied/ by % change in price or income

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10
Q

PED shows…

A

how demand changes with price

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Economics Unit 1 (9 decks)

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