L3: elasticity and its application (unfinished)

Question 1

not a question
ELASTICITY

Answer 1

Perfectly elastic demand = infinity (n=♾️)
Elastic demand = more than 1 (n>1)
Perfectly Inelastic Demand = 0 (n=0)
Inelastic demand = less than 1 (n<1)
Unit elastic demand = 1 (n=1)

Question 2

measures how much one variable responds to changes in another variable.

Answer 2

Elasticity

Question 3

is a numerical measure of the responsiveness of Qd or Qs to one of its determinants.

Answer 3

Elasticity

Question 4

measures how much Qd responds to a change in P.

Answer 4

Price elasticity of demand

Question 5

is the number halfway between the start and end values, the average of those values.

Answer 5

midpoint

Question 6

HIGHER ELASTICITY or LOWER ELASTICITY?

• Products with close substitutes

Answer 6

HIGHER ELASTICITY

Question 7

HIGHER ELASTICITY or LOWER ELASTICITY?

• Narrowly defined goods (more specific since mas meron substitute)
  > Eg ferrari
  > Eg blue jeans

Answer 7

HIGHER ELASTICITY

Question 8

HIGHER ELASTICITY or LOWER ELASTICITY?

• Luxury (pwede mo namang hindi bilhin kapag tumaas ung presyo)
  > Eg sparkling water(?)

Answer 8

HIGHER ELASTICITY

Question 9

HIGHER ELASTICITY or LOWER ELASTICITY?

• Gasoline in the long run
  > They will find cheaper alternative since hindi na sya magbabago
  > Eg. lilipat ng bahay nalang, magpapalit ng car into hybrid, etc.

Answer 9

HIGHER ELASTICITY

Question 10

• The flatter the curve = the?

Answer 10

bigger/higher the elasticity

Question 11

HIGHER ELASTICITY or LOWER ELASTICITY?

• maliit/walang impact sa demand when prices change

Answer 11

LOWER ELASTICITY

Question 12

HIGHER ELASTICITY or LOWER ELASTICITY?

• Products without substitutes

Answer 12

LOWER ELASTICITY

Question 13

HIGHER ELASTICITY or LOWER ELASTICITY?

• Broadly defined goods (more general and walang substitutes)
  > Eg cars
  > Eg clothes

Answer 13

LOWER ELASTICITY

Question 14

HIGHER ELASTICITY or LOWER ELASTICITY?

• Necessity (need mo bilhin kahit anong mangyari sa presyo)
  > Eg tubig

Answer 14

LOWER ELASTICITY

Question 15

HIGHER ELASTICITY or LOWER ELASTICITY?

• Gasoline in the short run
  > Its price still has a chance to go down so wala munang babaguhin masyado ung consumers(?)

Answer 15

LOWER ELASTICITY

Question 16

• The steeper the curve = the?

Answer 16

smaller/lower the elasticity

Question 17

The Determinants of Price Elasticity

Answer 17

• the extent to which close substitutes are available
• whether the good is a necessity or a luxury
• how broadly or narrowly the good is defined the
• time horizon—elasticity is higher in the long run than the short run

Question 18

measures how much Qs responds to a change in P.

Answer 18

Price elasticity of supply

Question 19

Loosely speaking, it measures sellers’ price-sensitivity.

Answer 19

Price elasticity of supply

Question 20

The more easily sellers can change the quantity they produce, the _____________ the price elasticity of supply.

Answer 20

greater

Question 21

For many goods, price elasticity of supply is ____________ in the long run than in the short run, because firms can build new factories, or new firms may be able to enter the market.

Answer 21

greater

Question 22

When demand is ______________, total revenue rises when price rises.

Answer 22

inelastic

Question 23

When demand is ____________, total revenue falls when price rises.

Answer 23

elastic

Question 24

The _________________________ of demand measures how much quantity demanded responds to changes in buyers’ incomes.

Answer 24

income elasticity

Question 25

The _____________________________of demand measures how much demand for one good responds to changes in the price of another good.

Answer 25

cross-price elasticity