4.5: Key Terms
- Page ID
- 215603
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- Constant Unitary Elasticity
- When a given percent change in price leads to an equal percentage change in quantity demanded or supplied.
- Cross-Price Elasticity of Demand
- The percentage change in the quantity of good A demanded as a result of a percentage change in the price of good B.
- Elastic Demand
- When the elasticity of demand is greater than one, indicating a high responsiveness of quantity demanded to changes in price.
- Elastic Supply
- When the elasticity of supply is greater than one, indicating a high responsiveness of quantity supplied to changes in price.
- Elasticity
- An economics concept that measures the responsiveness of one variable to changes in another variable.
- Elasticity of Savings
- The percentage change in the quantity of savings divided by the percentage change in interest rates.
- Inelastic Demand
- When the elasticity of demand is less than one, indicating low responsiveness of consumers to price changes.
- Inelastic Supply
- When the elasticity of supply is less than one, indicating low responsiveness of producers to price changes.
- Infinite Elasticity
- The extremely elastic case where quantity changes by an infinite amount in response to any change in price; horizontal in appearance.
- Perfect Elasticity
- See infinite elasticity.
- Perfect Inelasticity
- See zero elasticity.
- Price Elasticity
- The relationship between the percent change in price and the corresponding percentage change in quantity demanded or supplied.
- Price Elasticity of Demand
- The percentage change in the quantity demanded of a good or service divided by the percentage change in price.
- Price Elasticity of Supply
- The percentage change in the quantity supplied divided by the percentage change in price.
- Tax Incidence
- The manner in which the tax burden is divided between buyers and sellers.
- Unitary Elasticity
- When elasticity equals one, indicating that a change in price results in a proportional change in quantity demanded or supplied.
- Wage Elasticity of Labor Supply
- The percentage change in hours worked divided by the percentage change in wages.
- Zero Inelasticity
- The highly inelastic case where a change in price results in no change in quantity; vertical in appearance.