Term
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Definition
| a general concept used to quantify the response in one variable when another variable changes |
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Term
| price elasticity of demand |
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Definition
| ratio of % change of quantity demanded / % change in price; measures the responsiveness of quantity demanded to changes in price. |
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Term
| perfectly inelastic demand |
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Definition
| demand in which quantity demanded does not respond at all to a change in price |
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Term
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Definition
| demand that responds somewhat, but not a great deal, to changes in price. inelastic demand always has a numerical value between 0 and -1 |
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Term
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Definition
| demand relationship in which the % change in quantity of product demanded = % change in price in absolute value. demand elasticity with an absolute value greater than 1. |
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Term
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Definition
| demand relationship in which the % change in quantity of product demanded = % change in price in absolute value. demand elasticity with an absolute value greater than 1. |
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Term
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Definition
| dmeand in which quantity drops to 0 at slightest increase in price |
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Term
| determinants of demand elasticity |
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Definition
(1) availabity of substitutes
(2) importance of being unimportant
(3) time dimension! |
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Term
| income elasticity of demand |
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Definition
| measures responsiveness of demand to changes in income |
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Term
| X-price elasticity of demand |
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Definition
| measure of the response of the quantity of one good demanded to a change in the price of another good (i.e. the goods are either substitutes / complements) |
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Term
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Definition
| measure of the response of quantity of a good supplied to a change in price of that good. likely to be positive in output markets |
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Term
| elasticity of labor supply |
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Definition
| measure of the response of labor supplied to a change in the price of labor |
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