question
Signs don't matter
answer
Elasticity of Demand, Elasticity of Supply
question
Signs matter
answer
Elasticity of Income, Cross Elasticity
question
Elasticity of demand > 1
answer
Elastic
question
Elasticity of demand < 1
answer
Inelastic
question
Elasticity of Demand = 1
answer
Unit Elastic
question
Elasticity of Demand = 0
answer
perfectly inelastic
question
Elasticity of Demand = Infinity
answer
perfectly elastic
question
To increase Total Revenue of Inelastic Demand
answer
Increase Price
question
To increase Total Revenue of Elastic Demand
answer
Decrease Price
question
The equations for elasticity measures
answer
Responsiveness
question
Four determinants of elasticity
answer
-Number of substitutes
-Necessity (inelastic) vs Luxury (elastic)
-Amount of time to search
-Percentage of one's budget
-Necessity (inelastic) vs Luxury (elastic)
-Amount of time to search
-Percentage of one's budget
question
Cross Elasticity: (+)
answer
Substitutes
question
Cross Elasticity: (-)
answer
complements
question
Income Elasticity: (+)
answer
normal good
question
Income Elasticity: (-)
answer
inferior good
question
Income Elasticity = 0
answer
neutral good
question
Income Elasticity
answer
% change in quantity demanded / % change in income
question
Cross Elasticity
answer
% change in quantity demanded of good A / % change in Price of good B
question
Elasticity off demand
answer
% change in quantity demanded / % change in price
question
Elasticity of supply
answer
% change in quantity supplied / % change in price
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