ECON 20A Lecture Notes - Lecture 8: Demand Curve, Wwwq, Cream Cheese

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raspberrybutterfly912

19 Oct 2017

School

UC-Irvine

Department

Economics

Course

ECON 20A

Professor

Debapriya Chakraborty

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Document Summary

If the seller reduces price, we would increase our consumption more: remember: as you move along a linear curve and approach one of the axes, the. % changes in that axis variable gets smaller and the % changes of the opposite axis gets bigger. If price increases, tr will increase: when demand is elastic (elasticity > 1, p and tr move in opposite directions. If demand is unit elastic (elasticity = 1: tr remains constant when the price changes, no change in tr. Income elasticity of demand: another factor influencing demand other than price, definition: how much the quantity demanded of some good responds to a change in consume(cid:396)s" i(cid:374)(cid:272)o(cid:373)e. + direction: luxuries, cars, boats, tv, large income elasticity (it will be a large number change, + This year he(cid:396) i(cid:374)(cid:272)o(cid:373)e is (cid:1004),(cid:1004)(cid:1004)(cid:1004) a(cid:374)d she pu(cid:396)(cid:272)hased (cid:1005)(cid:1004) pai(cid:396)s of shoes. Income elasticity is the change in income / change in quatity: 10,000/4 = + value, b.

Related Questions

1. The concept of price elasticity of demand measures:

a. the slope of the demand curve.

b. the number of buyers in a market.

c. the extent to which the demand curve shifts as the result of a price decline.

d. the sensitiveness of quantities demanded to price changes.

2. When the percentage change in price is less than the resulting percentage change in quantity demanded:

a. demand is elastic.

b. demand is inelastic.

c. demand is unit elastic.

d. none of the above.

3. The elasticity of demand:

a. will be the same at each price-quantity combination on a stable demand curve.

b. tends to be elastic in high-price ranges and inelastic in low-price ranges.

c. tends to be inelastic in high-price ranges and elastic in low-price ranges.

d. is infinitely large for a perfectly inelastic demand curve.

4. Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 121. It can be concluded that the price elasticity of demand is: _______.

5. Total revenue rises as the price of a good increases if price elasticity of demand is:

a. unitary elastic

b. perfectly inelastic.

6. The demand for such products as salt, bread, and electricity tend to be:

a. relatively price elastic.

b. relatively price inelastic.

c. of unit price elasticity.

d. perfectly price elastic.

coffeeelephant81

The flatter the demand curve through a given point, the

a. greater the price elasticity of demand at that point.

b. greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the demand curve.

c. smaller the price elasticity of demand at that point.

d. closer the price elasticity of demand will be to the slope of the curve.

ivorymammoth188

a) What is the advantage of using the price elasticity rather than the slope of the demand curve or its inverse to measure the responsiveness in the quantity demanded of a commodity to a change in its price?

b) Why and how is the formula for arc price elasticity of demand different from the formula for point price elasticity of demand?

lemonsea-lion739

ECON 20A Lecture Notes - Lecture 8: Demand Curve, Wwwq, Cream Cheese

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