Viewing All Flashcards for AP Microeconomics: Elasticity

Questions

A measure of change in quantity demanded as it relates to the change in price

Percent change in quantity demanded ________________________ percent change in price

Elastic

Inelastic

Unit elastic

False; the ratio should compare absolute values of change.

Elastic

Unit elastic

Inelastic

The number of substitutes

Insulin

True; there are many kinds of food, so if the price of one kind goes up, it's easy to buy a different kind that's nearly the same.

A measure of the effects in price change of one good on the quantity demanded of another good

Positive

It increases

The quantity demanded for good F decreases.

Neagtive

A measure of the effect of an income change on the quantity demanded of a good

Percent change in quantity demanded __________________________ percent change in income

It will decrease.

A good that is bought in place of another as the price of the latter increases

False; similar goods are typically subsitutes.

True

Inferior

A measure of the change in quantity supplied as a result of a change in price

Percent change in quantity demanded ____________________________ percent change in price

1. time a supplier has to react to price change 2. substitutionability of factors of production

Elastic

A vertical line

A horizontal line

The one on the right

True

A

C

Halfway

Elastic

Elastic

Inelastic

Unit elastic

It increases (becomes more elastic)

It decreases (becomes more inelastic)

Perfect competition

The production of that good is homogenous (i.e. Store A and Store B sell the same good for the same price).

Probably inelastic, because it would face fewer substitutes in an isolated area

Elastic