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deadweight loss
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the total loss in consumer and producer surplus due to a change in policy
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What else does deadweight loss refer to?
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excess burden
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Where is the deadweight loss on the graph?
answer
A measure of the response of one variable to a change in another
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elasticity
answer
The ratio of the percentage change in the quantity of a good demanded to a given percentage change in its price, other things being equal
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price elasticity of demand
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A situation in which quantity demanded changes by a larger percentage then price
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elastic demand
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A situation in which quantity demanded changes by a smaller percentage then price
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inelastic demand
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A situation in which quantity demanded and price change by the same percentage
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unit elastic demand
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A situation in which the demand curve is a vertical line
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perfectly inelastic demand
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A situation in which the demand curve is a horizontal line
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perfectly elastic demand
answer
more
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more substitutes mean (more/less) elastic
answer
"big ticket" items are more elastic
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are "big ticket" items or "small ticket" items more elastic?
answer
elastic
question
luxury tends to be (inelastic/elastic)
answer
inelastic
question
necessity tends to be (inelastic/elastic)
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inelastic, elastic
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goods tend to be (inelastic/elastic) in the short run, but (inelastic/elastic) in the long run
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The price elasticity of demand for professors is different to the price elasticity of demand for students, textbook markets are set up to benefit professors not students
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Why do textbooks cost so much?
answer
lose
question
If demand is elastic and you increase your price, you'll (gain/lose) money
answer
gain
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If demand is inelastic and you increase your price, you'll (gain/lose) money
answer
0.2
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inelastic decimal- ____
answer
4.7
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elastic decimal- _____
answer
elastic
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demand is (elastic/inelastic)
answer
inelastic
question
supply is (elastic /inelastic)
answer
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