Unit 2 Vocab (Page 2) Flashcards
Price Elasticity of Demand:
A value that shows the relationship between how the quantity demanded for a good changes when the price changes
Inelastic Demand:
When the demand for a good/service does not change that much after a change in price
Perfect Elastic Demand:
When the demand for a good/service is totally dependent on the price of the good/service
Unit Elastic:
When the percentage change in quantity demanded/supplied is equal to the percentage change in price
Perfectly Inelastic Demand:
No change in quantity of a good/service demanded when there is a price change
Elastic Demand:
When a large change in quantity demanded is due to a change in price (greater than 1)
Price Elasticity of Supply:
How much quantity supplied changes due to a change in price
Elastic Supply:
When a large change in quantity supplied is due to change in price (greater than 1)
Inelastic Supply:
When the quantity supplied for a good/service does not change that much after a change in price
Perfectly Elastic Supply:
When the supply for a good/service is totally dependent on the price of the good/service
Perfectly Inelastic Supply:
No change in quantity of a good/service supplied when there is a price change
Alternative Inputs:
Different inputs that can replace other inputs during production
Income Elasticity of Demand:
How the quantity demanded for a good/service changes due to a change in income
Cross-Price Elasticity of Demand:
The percentage change in quantity demanded of a good due to a percentage change in a similar good
Market Equilibrium:
When the market supply and the market demand for a good/service is equal
