Theme 1 : Topic 13

Get Revising

Created by: psinfield
Created on: 20-01-19 16:26

What does price elastic mean?

Where demand is sensitive to changes in price.

1 of 10

What does price inelastic mean?

Where demand is not very sensitive to changes in price.

2 of 10

What is an inferior good?

A product with an income elasticity which is negative - eg if income rises, demand falls.

3 of 10

What is a normal good?

A product with an income elasticity of between 0.1 and 1.5.

4 of 10

What does income elastic mean?

Where demand is sensitive to changes in income.

5 of 10

What does income inelastic mean?

Where demand is not very sensitive to changes in income. eg toothpaste.

6 of 10

What does recession mean?

Two or more quarters of negative economic growth.

7 of 10

How to calculate percentage change.

(change in value/original value)x100

8 of 10

How to calculate price elasticity of demand

percentage change demand/percentage change in price (if demand is elastic then the PED figure will be bigger than 1. Always ignore - signs)

9 of 10

How to calculate income elasticity of demand

Percent change in demand/percent change in income (if the figure is above 1.5 then the demand is highly income elastic. If the figure is less than 1.5 it is not highly sensitive, but there is a - sign it shows it is an inferior good.)

10 of 10

Other cards in this set

Card 2

Front

What does price inelastic mean?

Back

Where demand is not very sensitive to changes in price.

Card 3

Front

What is an inferior good?

Back

Card 4

Front

What is a normal good?

Back

Card 5

Front

What does income elastic mean?

Back

View more cards

Get Revising

Theme 1 : Topic 13