Principles of Economics Vocabulary - Chapter 5
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6 terms
Terms | Definitions |
|---|---|
 elasticity | a measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants |
| price elasticity of demand | a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by 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 |
| income elasticity of demand | a measure of how much the quantity demanded of a good responds to a change in consumers' income, computed as the percentage change in quantity demanded divided by the percentage change in income |
| cross-price elasticity of demand | a measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good |
| price elasticity of supply | a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price |
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