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Elastic
answer
the price elasticity is greater than one
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Inelastic
answer
the price elasticity of demand is less than one
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Unit-Elastic
answer
the price elasticity of demand is equal to one
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Perfectly inelastic supply
answer
the price elasticity of supply is zero; vertical line
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Perfectly Inelastic
answer
when the quantity demanded does not respond at all to changes in the price; the demand curve is a vertical line
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Perfectly Elastic
answer
when any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line
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Cross-price elasticity of demand
answer
measures the effect of the change in one good's price on the quantity demanded of the other good; equal to the percent change in the quantity demanded of one good divided by the percent change in the other good's price
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Income elasticity of demand
answer
the percent change in the quantity of a good demanded when a consumer's income changes divided by the percent change in the consumer's income
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Income-elastic demand
answer
the income elasticity of demand is greater than 1
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Income-inelastic demand
answer
the income elasticity of demand is positive, but less than 1
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Price elasticity of supply
answer
a measure of the responsiveness of the quantity of a good supplied to the price of that good; the ratio of the percent change in the quantity supplied to the percent change in the price as you move along the supply curve
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Perfectly elastic supply
answer
the quantity supplied is zero below some price and infinite above that price; horizontal line
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Total Revenue
answer
the total value of sales of a good or service; equal to the price multiplied by the quantity sold
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Willingness to Pay
answer
the maximum price a consumer will pay for a good or service
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Individual Consumer Surplus
answer
the net gain to an individual buyer from the purchase of a good; equal to the difference between the buyer's willingness to pay and the price paid
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Total Consumer Surplus
answer
the sum of the individual consumer surpluses of all the buyers of a good in a market
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Consumer Surplus
answer
is used to refer to both individual consumer surplus and total consumer surplus
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Cost
answer
the lowest price at which a seller is willing to sell a good
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Individual Producer Surplus
answer
the net gain to an individual seller from selling a goo; equal to the difference between the price received and the seller's cost
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Total Production Surplus
answer
the sum of the individual producer surpluses of the sellers of a good in a market
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Producer Surplus
answer
is used to refer to both individual producer surplus and total producer surplus
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