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ECON 321 EXAM 4 PREP 2022/2023 # 44 questions and answers- all correct.
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ECON 321 EXAM 4 PREP 2022/2023 # 44 questions and answers- all correct.
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ECON 321 EXAM 4 PREP 2022/2023 #44 questions and answers- all correct.
price elasticity - -% change in quantity / % change in price
-highly elastic - -a slight change in price leads to a sharp change in the quantity
-price elasticity > 1 - -elastic
-price elasticity < 1 - -inelastic
-more specific goods w lots of substitutes are - -more elastic
-magnitude of price elasticity in long run - -larger in magnitude than in short run
(more time to adjust)
-perfectly elastic - -elasticity is infinite
-perfectly inelastic - -elasticity is 0
-income inelasticity of demand - -% change in quantity demanded / % change in
income
-cross price elasticity of demand - -% change in quantity of one good / % change price
in the other
-positive cross price elasticity - -goods are substitutes
-negative cross price elasticity - -goods are complements
-own price elasticity of demand - -% change in quantity demanded for a good / %
change price of that good
-steep demand curve means consumer surplus will be - -larger
-price ceilings cause excess - -demand
-price floors cause excess - -supply
-transfer - -surplus moving from producer to consumer or vice versa as a result of price
regulation
-when supply and demand are more elastic, what happens to DWL - -it is larger
-DWL above equilibrium market price - -suffered by consumers
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