question
consumer surplus
answer
the difference between the price paid for a good or service and the benefit/value of that product/service.
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producer surplus
answer
the profit they make off of selling a product/good or offering a service
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elasticity
answer
a numerical measure of responsiveness of one variable following a change in another variable, ceteris paribus
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elastic
answer
where the relative change in demand or supply is greater than the change in price
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inelastic
answer
where the relative change in demand or supply is less than the change in price
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unit elastic
answer
where the change in price is relatively the same as the change in quantity demanded giving a numerical value of 1
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perfectly elastic
answer
where all that is produced is sold at a given price
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perfectly inelastic
answer
where a change in price has no effect on the quantity demanded
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Price elasticity of demand (PED)
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a numerical measure of the responsiveness of the quantity demanded to a change in price of a product
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Price elasticity of supply (PES)
answer
a numerical measure of the responsiveness of the quantity supplied to a change in the price of the product
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Cross elasticity of demand (XED)
answer
a numerical measure of the responsiveness of the quantity demanded for one product following a change in the price of another related product
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Income elasticity of demand (YED)
answer
a numerical measure of the responsiveness of the quantity demanded following a change in income
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