Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Theme 1 Economics > Elasticity > Flashcards

Elasticity Flashcards

1
Q

Price elasticity of demand

A

The responsiveness of demand to a change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Equation for PED

A

Percentage change in quantity demanded divided by percentage change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How to knows if something is inelastic or elastic

A

If answer is between 0 and -1 then is inelastic

If below -1 then is elastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Inelastic

A

Change in price has little effect on demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Gradients relationship to elasticity

A

Higher gradient inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Cerberis paribus

A

Everything stays equal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How to make product inelastic

A

Essential, brand loyalty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Determinants of elasticity of demand

A 
Time period 
Number and closeness of substitutes
Proportion of income taken up by product 
Luxury of necessity 
Habit forming 
Brand loyalty
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Price elasticity of supply

A

The responsiveness of supply to a change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Price elasticity of supply equation

A

Percentage change in quantity supplied divided by change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Price elasticity of supply values

A

More than one elastic

Less than one inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Determinants of elasticity of supply

A

Availability of four factors of production
Time
Spare capacity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Income elasticity of demand

A

The responsiveness of demand to a change in income
More than one elastic less than one inelastic
More than positive two then luxury

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Income elasticity of demand formula

A

Percentage change in quantity demanded over percentage change in income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Normal good

A

Demand rises as income rises

Positive value from formula

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Inferior good

A

Cheaper, demand falls as income rises, negative value from formula

17
Q

Cross elasticity

A

The responsiveness of a rise in price of good a to the demand of good b
Positive value substitute negative complimentary

18
Q

Cross elasticity of demand

A

The responsiveness of demand to a change in price of a related good
Positive value substitute negative complimentary good

19
Q

Cross elasticity of demand formula

A

Percentage change of quantity demanded of good a divided by change in price of good b

Theme 1 Economics (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions