Elasticity

HideShow resource information
Price elasticity
the responsiveness of demand to a change in the price level. Formula: % change in quantity demanded/ % change in price
1 of 6
Income elasticity of demand
the proportion to which demand changes when there is a change in income. Formula: % change in quantity demanded/ % change in income
2 of 6
Substitutes
Goods that can be used as alternatives to another good e.g. bus and rail services or Mars bar and snickers. CLOSE substitutes are good alternatives whereas WEAK ones are not e.g. gas fired power and hydroelectric.
3 of 6
Commodity
a good that is traded - usually raw materials or semi-manufactured goods that are traded in bulk e.g. tea, iron ore, oil or wheat. They are often unbranded goods (homogeneous) where all firms' products are very similar.
4 of 6
Normal goods
Goods that will increase in demand when incomes rise
5 of 6
Inferior goods
Goods that will decrease in demand when incomes rise
6 of 6

Other cards in this set

Card 2

Front

the proportion to which demand changes when there is a change in income. Formula: % change in quantity demanded/ % change in income

Back

Income elasticity of demand

Card 3

Front

Goods that can be used as alternatives to another good e.g. bus and rail services or Mars bar and snickers. CLOSE substitutes are good alternatives whereas WEAK ones are not e.g. gas fired power and hydroelectric.

Back

Preview of the back of card 3

Card 4

Front

a good that is traded - usually raw materials or semi-manufactured goods that are traded in bulk e.g. tea, iron ore, oil or wheat. They are often unbranded goods (homogeneous) where all firms' products are very similar.

Back

Preview of the back of card 4

Card 5

Front

Goods that will increase in demand when incomes rise

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Elasticity resources »