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CHAP 6 ECON 2020
Final Exam Flashcards
11
Economics
Undergraduate 2
05/04/2009

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Term
Price Elasticity of Demand
Definition
The responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product's price.
Term
Price Elasticity of Demand (midpoint formula)
Definition
((Q2-Q1)/((Q1+Q2)/2))/((P2-P1)/((P1+P2)/2))
Term
Elastic Demand
Definition
abs val is greater than one.
Term
Inelastic Demand
Definition
abs val is less than one.
Term
Unit-Elastic Demand
Definition
abs val is equal to one.
Term
Perfectly Elastic Demand
Definition
equal to infinity.
Term
Perfectly Inelastic Demand
Definition
equal to zero.
Term
Total Revenue
Definition
The total amount of funds recieved by a seller of a good or service, calculated by multiplying price per unit by the number of units sold.
Term
Cross-Price Elasticity of Demand
Definition
The percentage change in quantity demanded of one good divided by the percentage change in the price of another good.
Term
Income Elasticity of Demand
Definition
A measure of the responsiveness of quantity demanded to changes in income, measured by the percentage change in quantity demanded divided by the percentage change in income.
Term
Price Elasticity of Supply
Definition
The responsiveness of the quantity supplied to a change in price, measured by dividing the percentage change in the quantity supplied of a product by the percentage change in the product's price.
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