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15 Cards in this Set

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"Price elasticity of demand"
(p. 144)
The ____________ is the ratio of the precent change in the quantity demanded to the percent change in the price as we move along the demand curve (dropping the minus sign).
"Midpoint method"
(p. 146)
The midpoint method is a technique for calculating the percent change. In this approach, we calculate changes in a variable compared with the average, or midpoint, of the starting and final values.
"Perfectly inelastic demand"
(p. 148)
Demand is __________ when the quantity demanded does not respond at all to changes in the price. The corresponding demand curve is a vertical line.
"Perfectly elastic demand"
(p. 149)
Demand is __________ when any price increase will cause the quantity demanded to drop to zero. The corresponding demand curve is a horizontal line.
"Elastic demand"
(p. 149)
Demand is ________ if the price elasticity of demand is greater than 1.
"Inelastic demand"
(p. 149)
If the price elasticity of demand is less than 1, then it can be deemed _________.
"Unit-elastic demand"
(p. 149)
If price elasticity of demand is exactly 1, then it can be deemed _________.
"Total revenue"
(p. 150)
The ___________ is the total value of sales of a good or service. It is equal to the price multiplied by the quantity sold.
"Cross-price elasticity of demand"
(p. 155)
The __________ between two goods measures the effect of the change in one good's price on the quantity demanded of the other good. It is equal to the percent change in the quantity demanded of one good divided by the percent change in the other good's price.
"Income elasticity of demand"
(p. 156)
The ____________ is 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.
"Income-elastic demand"
(p. 157)
The demand for a good is __________ if the income elasticity of demand for that good is greater than 1.
"Income-inelastic demand"
(p. 157)
The demand for a good is __________ if the income elasticity of demand for that good is positive but less than 1.
"Price elasticity of supply"
(P. 159)
The __________ is a measure of the responsiveness of the quantity of a good supplied to the price of that good. It is the ratio of the percent change in the quantity supplied to the precent change in the price as we move along the supply curve.
"Perfectly inelastic supply"
(p. 160)
There is ____________ when the price elasticity of supply is zero, so that changes in the price of the good have no effect on the quantity supplied. This supply curve is a vertical line.
"Perfectly elastic supply"
(p. 160)
There is ____________ when even a tiny increase or reduction in the price will lead to very large changes in the quantity supplied, so that the price elasticity of supply is infinite. This supply curve is horizontal line.