Elasticity Flashcards
1
Q
Price Elasticity of Demand
A
A measure of how quantity demanded for a product varies based on price.
2
Q
Income Elasticity of Demand
A
A measure of how quantity demanded for a product varies based on income.
3
Q
Inferior Goods
A
Goods with a negative income elasticity (as incomes increase, less will be demanded)
4
Q
Necessities/Normal Goods
A
Goods with an income elasticity between 0 and 1 (as incomes increase, more will be demanded, but less than the proportionate change).
5
Q
Luxury Goods
A
Goods with an income elasticity of more than 1 (as incomes increase, more will be demanded, and more than the proportionate change).
6
Q
Price Elasticity of Supply
A
A measure of how quantity supplied for a product varies based on price.
