AP Microeconomics Unit 2

Elastic

>1

Inelastic

<1

Unit Elastic

=1

Inferior Good

- coefficient (Income Elasticity)

Normal Good

+ coefficient (Income Elasticity)

Complements

- coefficient (Cross-Price Elasticity)

Substitutes

+ coefficient (Cross-Price Elasticity)

Inefficiency

What does DWL (Dead Weight Loss) represent?

Shortage

QD>QS

Surplus

QS>QD

I (insect)

income

N (insect)

number of buyers

S (insect)

substitutes

E (insect)

expectations

C (insect)

complements

T (insect)

tastes

R (ratnest)

resources

A (ratnest)

alternate production

T (ratnest)

technology

N (ratnest)

number of sellers

E (ratnest)

expectations

S (ratnest)

subsidies

T (ratnest)

taxes