Term
| What direction do Supply Curves Move in? |
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Definition
| Diagonally Up and to the Right |
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Term
| What direction do Demand Curves Move in? |
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Definition
| Diagonally Down and to the Right |
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Term
| When is our first class test? |
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Definition
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Term
| What kind of relationship do price and quantity demanded have? |
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Definition
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Term
| What kind of relationship do price and quantity supplied have? |
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Definition
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Term
| What is Price Elasticity of Demand? |
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Definition
| Measurement of buyers’ responsiveness to a price change. |
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Term
| What does Percent of Change of Quantity Demanded Divided by Percent of Change in Price Equal? |
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Definition
| The Elasticity of Demand aka the price elasticity of demand for the Good. |
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Term
| If p0=original price, p1=new price, q0=original quantity demanded, and q1=new quantity demanded, then what is the formula for the elasticity of quantity demanded? |
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Definition
| ((q1-q0)/q0)/((p1-p0)/p0)=The Elasticity of Demand aka the price elasticity of demand for the Good. |
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Term
| Is Elasticity of Demand a ratio of percentage changes or absolute changes? |
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Definition
| A ratio of percentage changes. |
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Term
| Is Slope of a ratio of percentage changes or absolute changes? |
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Definition
| A ratio of absolute changes. |
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Term
| Is Elasticity sensitive to monetary units? |
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Definition
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Term
| Let’s say p0=$3, p1=$2, q0=60lbs, q1=100lbs, then how do you calculate its elasticity of demand? |
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Definition
| ((100-60)/60)/((2-3)/3)=((⅔)/(-⅓)=(⅔)(-3)=-2 |
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Term
| When Elasticity of Demand is Greater than One, then Demand is what? |
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Definition
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Term
| When Elasticity of Demand is Less than One, then Demand is what? |
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Definition
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Term
| When Elasticity of Demand is Equal to One, then Demand is what? |
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Definition
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Term
| For Elasticity of Demand to be greater than one, then the numerator must be what? |
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Definition
| Greater than the denominator. |
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Term
| For Elasticity of Demand to be less than one, then the numerator must be what? |
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Definition
| Less than the denominator. |
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Term
| For Elasticity of Demand to be equal to one, then the numerator must be what? |
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Definition
| Equal to the denominator. |
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Term
| What does midpoint formula do? |
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Definition
| Takes the average elasticity between any two points along a demand function. |
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Term
| What is the midpoint formula? |
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Definition
| ((Change in Quantity)/((q0+q+1)/2))/((Change in Price)/((p0+p1)/2)) |
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Term
| What does (Ed^m) represent? |
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Definition
| Elasticity of Demand found through midpoint formula. |
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Term
| How do you know if slope is constant? |
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Definition
| Price changes the same number of intervals (ex.price goes decreases by 2 as quantity demanded increases by 2) in either direction as quantity demanded, consistently throughout your stream of data. |
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Term
| Your revenue does not increase forever if you just continually do what? |
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Definition
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Term
What is the solution to a problem in this form?
(a/b)/(a/c) |
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Definition
1.)Multiply the numerator by the flipped denominator.
(a/b)*(c/a)
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2.)The a's cancel out and the two fractions merge.
(c/b)
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Term
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Definition
| Quantity of Goods Sold Times Price of Goods Sold. |
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Term
| What does elastic demand represent? |
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Definition
| Percent Change in Quantity Demanded is significantly higher than Percent Change in Price. |
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Term
| What does unit elastic demand represent? |
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Definition
| The change in percent of price and the change in percent of quantity demanded is equal. |
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Term
| When demand is elastic, what happens to Total Revenue? |
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Definition
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Term
| When demand is unit elastic, what happens to Total Revenue? |
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Definition
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Term
| When demand is inelastic what happens to total revenue? |
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Definition
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