Elasticity

Question 1

4 types of elasticity

Answer 1

• Ped
• Pes
• Yed
• Xed

Question 2

How to work out cross elasticity of demand

Answer 2

% change QD of good A / % change Price of good B

Question 3

How to work out price elasticity of demand

Answer 3

% change QD / % change Price

Question 4

Range for being an inelastic good

Answer 4

> 1

Question 5

Determinants for elasticity of demand

Answer 5

• Time period
• Number of substitutes
• Luxury or necessity
• Habit forming
• Proportion of income

Question 6

How to work out price elasticity of supply

Answer 6

% change QS / % change Price

Question 7

Determinants of elasticity of supply

Answer 7

• 4 factors of production
• Time
• Spare capacity
• Spare stock and components

Question 8

How to work out income elasticity of demand

Answer 8

% change D / % change Income

Question 9

Normal good

Answer 9

Demand rises as income rises >0

Question 10

Inferior good

Answer 10

Demand falls as income rises <0

Question 11

Luxury good

Answer 11

2+ (sometimes 1+)

Question 12

Do substitutes give a positive or negative answer

Answer 12

Positive

Question 13

Do complements give a positive or negative answer

Answer 13

Negative

Question 14

1 Unitary elastic

Answer 14

% change quantity demand same as % change in price

Question 15

0 perfectly inelastic

Answer 15

% change quantity demand stays the same dosent matter what the change in price

Question 16

Infinite perfectly elastic

Answer 16

% change quantity demand drops of completely if there is any change in price