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Total Revenue
Interpretation
100
XED when the price of good x changes from 10 to 6, and quantity for good y changes from 20 to 16
What is 2?
100
This determinant explains why price elasticity of demand is high for pentel markers.
What is number and closeness of substitutes?
100
This characteristic tells you that a supply curve will be unit elastic.
What is it goes through the origin.
100
If demand is unit elastic, this will happen to total revenue if there is a price change.
What is nothing will happen, the change in price will equal the change in quantity.
100
PED of 0.3. This good is a luxury/necessity.
What is as price increases 1%, demand decreases by 0.3%. Good is a necessity.
200
PES when price changes from 50 to 65 and Quantity supplied changes from 400 to 550.
What is PES of 1.25?
200
This determinant explains why demand for automotive gas is inelastic in the short run.
What is length of time?
200
Demand curves that have this characteristic are inelastic.
What is they are steeper?
200
When demand is elastic, an increase in price causes this in total revenue.
What is a decrease in total revenue?
200
XED of 1.8.
What is as the price of good y goes up 1 percent, quantity demanded of good x increases by 1.8%.
300
YED if income decreases by 7% and quantity demanded goes from 8 to 10.
What is 3.5?
300
This explains why supply is elastic for any good manufactured in China.
What is mobility of factors of production?
300
This is the part of the demand curve that is inelastic.
What is at low prices and high quantities / below the midpoint.
300
When demand is inelastic, a decrease in price causes this in total revenue.
What is a decrease / fall in total revenue.
300
A positive XED indicates that the goods are this.
What is compliments?
400
XED if a 9% increase in the price of one good causes a 12% decrease in quantity demanded of another good.
What is XED of 1.3?
400
The reason a ski making factory can easily switch to making surfboards in the summer.
What is spare capacity?
400
Elastic supply curves have this characteristic.
What is a negative Q intercept / positive P intercept.
400
Total revenue is at a maximum at this point.
What is the unit elastic point.
400
Interpret a YED of 3.6 and say what kind of good it is.
What is as income increases by 1%, demand for the good increases by 3.6%. The good is a luxury.
500
If PES is 2.4, and the original quantity produced was 200 at a market price of 8. The price decreases to 6. This is the quantity produced at that price.
What is 80.
500
The reason that the service industry grows faster than primary commodities.
What is necessities vs. luxuries?
500
A negative income elasticity of demand means that this curve moves in this direction.
What is demand and to the left.
500
Draw a graph showing producer revenue if an indirect tax is imposed on a good.
500
This is why YED for cars might be 1.2 in the United States and 2.3 in Vietnam
What is cars a more of a necessity in the United States - most people's incomes allow them to afford a car, whereas incomes in Vietnam are lower, so they cannot afford cars.