Price Elasticity of Demand
Price Elasticity of Supply
Income Elasticity
Cross Price Elasticity
Miscellaneous
100
What is the equation used to find price elasticity of demand along a segment of a demand curve?
% change Q / % change P
100
What is the equation used to find the price elasticity of supply over a segment of a supply curve?
% change Qs / % change P
100
What is the equation used to find the income elasticity over a segment of a demand curve?
% change Q / % change I
100
What is the equation used to find the cross price elasticity over a segment of a demand curve?
% change Qx / % change Py
100
Name 2 of the 3 factors which determine elasticity of price demand?
availability of substitutes, time, budget share
200
What is the equation used to find the price elasticity of demand at a single point on a demand curve?
(1 / slope) * (P / Q)
200
A perfectly inelastic supply curve has a slope equal to what?
infinity
200
If the income elasticity of as good is positive the good is considered to be a ______ good.
normal
200
If the cross price elasticity of two goods is positive the goods are considered to be _______.
substitutes
200
On an inelastic region of a demand curve the total revenue curves slope is which of the following - positive, negative, or unrelated to the elasticity of the demand curve?
negative
300
If the price elasticity of a good is greater than 1 the good is ________?
elastic
300
a perfectly elastic supply curve has a slope equal to what?
0
300
If the income elasticity of as good is negative the good is considered to be a ______ good.
inferior
300
If the cross price elasticity of two goods is negative the goods are considered to be a ______.
complements
300
if we are operating on an elastic region of a demand curve, in order to increase total revenue we should do which of the following to price - lower price, raise price, not enough information to say.
lower price
400
If the price elasticity of a good is less than 1 the good is ________?
Inelastic
400
if the supply curve intersects the x and y axis at the point (0,0) what is the price elasticity of supply along the curve?
1
400
If the income elasticity of as good is greater than 1 the good is considered to be a ______ good.
luxury
400
If the cross price elasticity of as good equals zero the goods are considered to be ______.
unrelated
400
if we are operating on an inelastic region of a demand curve, in order to increase profit we should do which of the following to price - lower price, raise price, not enough information to say.
not enough information to say. elasticity and total revenue are related, we can not draw conclusions about profit.
500
If the price elasticity of a good is equal to 1 the good is ________?
unit elastic
500
what is the equation to find price elasticity of supply at a specific point on a supply curve?
(1 / slope) * (P / Qs)
500
What does the income elasticity of a good measure?
how quantity demanded responds to a change in income
500
Does the magnitude of the cross price elasticity of demand tell us anything about the goods?
yes, the farther away the cross price elasticity is from zero the greater the relationship (closer tied together) the goods are. ex. goods with a cross price elasticity of -10 are closer compliments than goods with a cross price elasticity of -2
500
can we compare measures of happiness in utils for different people?
no. a util is a subjective measure and does not have the same value for everyone.
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