ECON 202 EXAM 2 DUCKING OLE MISS
QUESTIONS & DETAILED ANSWERS 100%
1. Price elastcity
a measure of the responsiveness of quantity demanded to a change in
of demand
price,equal to the percentage change in quantity demanded divided by
the percentage change in price
2. elastic demand the % change in quantity demanded is greater than the % change in
price. this results in the price elasticity of demanded to be greater than 1.
demand for these goods is very responsive to changes in price
3. inelastic demand the % change in quantity demanded is less than the % change in
proce. this
results in the price elastcicity od demand to be less than 1. demand for
goods with inelastic demand is not very responsive to changes in price
4. unit elastic the % change in quantity demanded is just equal to the % change in
de-mand price. this results in the price elastcity of demanded to be equal to 1
total rev
5. total revenue the price per unit times quantity sold
6. cross elasticity a measure of how responsive the quantity demanded of one good is to
of demand changes in the price of another good
7. substitutes goods consumers will substitue for one another when the price of one
good rises the demanded for the other good increases and vice versa
8. complements goods are consumed together when the price of the complementary
good rises the demand for the other good declines and vice versa
9. income demand
elasticity of
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11
, ECON 202 EXAM 2 DUCKING OLE MISS
QUESTIONS & DETAILED ANSWERS 100%
a measure of how responsive quantity demanded is to changes in consumer income
10. normal goods a good for which an increse in income results in increasing demand
11. luxary goods a good for which an increase in income results in demand rising more
than the increase in income
2/
11
QUESTIONS & DETAILED ANSWERS 100%
1. Price elastcity
a measure of the responsiveness of quantity demanded to a change in
of demand
price,equal to the percentage change in quantity demanded divided by
the percentage change in price
2. elastic demand the % change in quantity demanded is greater than the % change in
price. this results in the price elasticity of demanded to be greater than 1.
demand for these goods is very responsive to changes in price
3. inelastic demand the % change in quantity demanded is less than the % change in
proce. this
results in the price elastcicity od demand to be less than 1. demand for
goods with inelastic demand is not very responsive to changes in price
4. unit elastic the % change in quantity demanded is just equal to the % change in
de-mand price. this results in the price elastcity of demanded to be equal to 1
total rev
5. total revenue the price per unit times quantity sold
6. cross elasticity a measure of how responsive the quantity demanded of one good is to
of demand changes in the price of another good
7. substitutes goods consumers will substitue for one another when the price of one
good rises the demanded for the other good increases and vice versa
8. complements goods are consumed together when the price of the complementary
good rises the demand for the other good declines and vice versa
9. income demand
elasticity of
1/
11
, ECON 202 EXAM 2 DUCKING OLE MISS
QUESTIONS & DETAILED ANSWERS 100%
a measure of how responsive quantity demanded is to changes in consumer income
10. normal goods a good for which an increse in income results in increasing demand
11. luxary goods a good for which an increase in income results in demand rising more
than the increase in income
2/
11
