Elasticity

Question 1

Price Elasticity of Demand

Answer 1

The ratio of the percentage of change of quantity demanded to the percent change in price… better indicator than slope

Question 2

Perfectly inelastic demand

Answer 2

Demand in which quantity demanded does not respond to price whatsoever

Question 3

Inelastic Demand

Answer 3

When quantity Demanded responds in a smaller way that the change in price

Question 4

Unitary Elasticity

Answer 4

% change in price = % change in quantity demanded

Question 5

Elastic Demand

Answer 5

% change in price < % change in quantity demanded

Question 6

Perfectly elastic Demand

Answer 6

Demand in which quantity drops to zero at the slightest price increase

Question 7

Midpoint Formula

Answer 7

Using the midpoint value as a way to calculate percentages … of both price and quantity

Question 8

Determinants of Demand Elasticity

Answer 8

Availability of substitutes; appearance of unimportance; time …

Question 9

Income Elasticity of Demand

Answer 9

% change quantity demanded / % change in income

Question 10

Cross-price Elasticity of Demand

Answer 10

% change in quantity demanded of a certain product / % change in price of a different product

Question 11

Elasticity of supply

Answer 11

% change in quantity supplied / % change in price