Chapter 5 - Elasticity and its Application

Time horizons

________ have less of elastic demand than goods.

denominator

The ________ is the percentage change in price when using the midpoint method.

numerator

The ________ is the percentage change in quantity when using the midpoint method.

Slope

________: ratio of changes in the two variables; Elasticity: ratio of percentage changes in the two variables.

Total revenue

________ is often used when studying the changes in supply or demand in markets.

Goods

________ with close substitutes are often more elastic in demand.

percentage change

The ________ in price is positive, while the ________ in the demanded quantity is negative.

midpoint method

The ________ helps to better calculate elasticities.

Elasticity

________: a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants.

Demand

________ is often elastic if the ________ in quantity substantially changes in the price.

Price elasticity of supply

________= percentage change in quantity supplied /percentage change in price.

unit elasticity

A(n) ________ is when the elasticity is exactly one and the percentage change in quantity is equal to the percentage change in price.

Total revenue

________: the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold.