Intro To Elasticity Flashcards
1
Q
4 types of elasticity
A
PeD= price elasticity of demand
PeS= price elasticity of supply
XeD= cross elasticity of demand
YeD= income elasticity of demand
2
Q
Why do we use elasticity??
A
Helps us make accurate prediction about how changed to one factor will affect another factor eg price and demand
3
Q
How do we work out PeD??
A
% change of QD / % change in price
4
Q
How do you work out PeS??
A
% change in quantity supplied / % change in price
5
Q
How do you work out XeD??
A
% change in QD of one item / % change in price of another item
6
Q
How do you work out YeD??
A
% change in QD / % change in income
