Elasticity Flashcards
1
Q
perfectly inelastic (elasticity of demand)
A
elasticity equals zero and is insulin something you need (does not matter how much it costs)
2
Q
perfectly elastic (elasticity of demand)
A
elasticity equal infinity
3
Q
inelastic (elasticity of demand)
A
elasticity equals to less than one, gasoline becasue even if the price increases people will still buy it
4
Q
elastic (elasticity of demand)
A
elasticity equals to greater than one, price of a car goes up you have many more options
5
Q
income elastic
A
positive and greater than one and normal good
6
Q
income inelastic
A
positive and less than one, and normal good
7
Q
income negative elastic
A
inferior good
8
Q
cross elasticity (negative)
A
complements
9
Q
cross elasticity (positive)
A
substitutes
