Income And Cross Elasticity Flashcards
1
Q
Complement
A
A good that is purchased with other goods to satisfy a want. Complements have a negative cross elasticity of demand
2
Q
Cross elasticity
A
A measure of the responsiveness of quantity demanded of one good to a change in price of another good
3
Q
Income elasticity of demand
A
A measure of the responsiveness of quantity demanded to a change in income
4
Q
Inferior good
A
A good where demand falls when income rises
5
Q
Normal good
A
A good where demand increases when income rises
6
Q
Substitute
A
A good which can be replaced by another to satisfy a want. Substitutes have a positive cross elasticity of demand
