Elasticity Part 2 Flashcards
0
Q
Cross price elasticity
A
Indicates how a quantity demanded responds to a change in price associated with the price of an item.
1
Q
Income elasticity of demand
A
Describes how change in household outcome would affect the quantity demanded of an item.
2
Q
Normal good
A
Item consumption increases with increase income.
3
Q
Inferior good
A
Consumption decreases with rising income and consumption increases with falling income.
4
Q
Neutral good
A
Is unaffected by changes in income.
5
Q
EI<0
A
Inferior good
6
Q
EI=0
A
Neutral good
7
Q
EI>0
A
Normal good
8
Q
EXY< 0
A
X and Y are complements
9
Q
EXY=0
A
X and Y are independent
10
Q
EXY >0
A
X and Y are substitutes
