Micro PMT context (unfinished)

0.0(0)
studied byStudied by 0 people
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/16

encourage image

There's no tags or description

Looks like no tags are added yet.

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

17 Terms

1
New cards

What are factors shifting the demand curve?

Population
Advertising
Substitutes
Income
Fashion/tastes
Income tax
Complement’s price

2
New cards

What does it mean if a good/service is price inelastic? Give an example

Describes goods or services where a price change leads to a proportionally smaller change in the quantity demanded/supplied (PED < 1)
Example: petrol

3
New cards

What does it mean if a good/service is price elastic? Give an example

Describes goods or services where a price change leads to a proportionally larger change in the quantity demanded/supplied (PED > 1)

4
New cards

What is the equation for price elasticity of demand? (PED)

%ΔQD/%ΔP

5
New cards

What is the equation for price elasticity of supply? (PES)

%ΔQS/%ΔP

6
New cards

What is the equation for cross-price elasticity of demand? (XED)

%ΔQD for A/%ΔP for B

7
New cards

What is the equation for income elasticity of demand? (YED)

%ΔQD/%ΔY

8
New cards

What does a positive YED mean?

Normal good

9
New cards

What does a negative YED mean?

Inferior good

10
New cards

What does a YED > 1 mean?

Luxury good

11
New cards

What does a YED < 1 mean?

Inelastic

12
New cards

What are factors that shift the supply curve?

Productivity
Indirect taxes
Number of firms
Technology
Subsidies
Weather
Costs of production

13
New cards

What does a perfectly elastic supply curve look like?

Horizontal

14
New cards

What does a perfectly inelastic supply curve look like?

Vertical

15
New cards

What is unitary price elastic?

PED = 1

16
New cards

What is an ad valorem tax?

indirect tax imposed on a good where the value of the tax is dependent on the value of the good

17
New cards

What is