54 Multiple choice questions
- Percent change in qunaity demanded over the percent change in income
- There can be more than one demand curve associated with the market.
- Measures of the sensitivity of one variable to another.
- Elasticity of demand between 0 and 1.
- An elasticity measured just a short time after a price change.
- Movement along
- Income elasticity of demand
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the quantity demanded at different prices when people only have a short
period of time ( a few weeks or a few months) to adjust.
a special case of a straight-line demand curve, demand becomes more and
more elastic as we move upward and leftward along the curve.
- Good point.
- Income elasticity
- The quantity demanded is relatively insensitive to price changes.
- A price elasticity of demand approaching infinity.
- A price elasticity of demand greater than 1.
- because farmers have the time to make further adjustments to increase production, such as shifting from other crops to corn.
percentage change in quantity supplied caused by a 1% change in price.
Percent change in price of quantity suppled divided by percent change in
- An elasticity measured a year or more after price change.
- Shows quantity demanded after buyers have had much longer to adjust to a price change-- a year or more.
- Elasticity values from data on prices and quantities
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- That quantity demanded is relatively sensitive to price changes.
measures the sensitivity of quantity demanded to the price of the good
itself. The percentage change in quantity demanded divided by the
percentage change in price.
- They tell us the percentage change in one variable caused by a 1% change in the other.
- Less elastic
- A price elasticity of demand equal to 0.
- The longer we wait after a price change, the greater the supply response to a price change.
- Cross price elasticity
answer depends on the price elasticity of demand for the good. Note
that the total revenue of sellers in a market (TR) is the price per unit
℗ times the quantity that people buy. TR= P x Q. When we raise price, p
goes up, but q goes down. What happens to the product depends on which
one changes by a larger percentage.
the less we regard the good as a necessity, 2. the easier it is to find
substutitues for the good 3. the greater the share of householders'
budget that is spent on the good, and 4. the more time we allow for
quantity demanded to respond to the price change.
- move along
- Long, short
- A price elasticity of demand equal to 1.
- Wow, good point.
- More elastic
- The percentage change in the quantity demanded of one good caused by a 1% percent change in the price of another good.
- Inelastic, elastic