# Shared Flashcard Set

## Details

Chapter 6 vocab
Elasticity chap6
15
Economics
03/01/2010

Term
 Price elasticity of demand
Definition
 ratio of the percent cahnge in the quantity demanded to the percent change in the price as we move along the dmeand curve(dropping the minus sign).
Term
 Midoint method
Definition
 Is a technique for calcualting the percent change, in this approach, we calcualte cahnges in a variable compared with the average, or midpoint, of the starting and final values.
Term
 perfectly inelastic demand
Definition
 Demand is perfectly inelastic when the quantity demanded does not respond at all to changes in the price, when demand is perfectly ineslatic, the demand curve is a vertical line.
Term
 perfectly elastic
Definition
 Demand is perfetly elastic when any price increase will cause the quantity demanded to drop to zero. When demand is perfectly elastic, the demand curve is a horizontal line.
Term
 Unit-elastic
Definition
 If the price elasticity of demand is exactly 1
Term
 Elastic
Definition
 Demand is elastic when price elasticity is greater than 1
Term
 inelastic
Definition
 if the price elasticity of demand is less than 1
Term
 Total Revenue
Definition
 The total revenue is the revenue of sales of ag ood or service. it is equal to the price multiplied by the quantity sold.
Term
 cross price elasticity of demand
Definition
 Between two goods measure the effect of the change in one goods price in hte quantity demanded of the other good. It is equal to teh percent change in the quantity demanded of one good divided by the percent change in the pother good's price.
Term
 Income elasticity of demand
Definition
 Is the percent change in the quantity of a good demanded whrn a consumer's income changes divided by the percent change in the consumers income.
Term
 Income elasitc
Definition
 The demand for a good is income elastic if the income of elasticity of demand for that good is greater then 1
Term
 income inelastic
Definition
 The demand for a good is income inelastic if the income of elasticity of demand for that good is positive but less than 1
Term
 Price elasticity of supply
Definition
 Is a measure of the responsiveness of the quantity of a good supplied to the price of that good, its the ratio of the percent of that good. It is the ratio of the percent change in the quantity supplied to the percent change in the price as we move along the supply curve.
Term
 perfectly inelastic supply
Definition
 when the price elasticity of supply is zero, so that changes in the price of the good have no effect on the quantity supplied. A perfectly inelastic supply curve is a vertial line.
Term
 perfectly elastic supply
Definition
 There is perfetly elastic supply when even a tiny increase or reduction in the price will lead to very large changes in the quantity supplied, so that the price elasticity of supply is infinite. A percetly elastic supply curve is a horizontal line.
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