Econ Ch5 - Elasticity

the highly inelastic case of demand or supply in which a percentage change in price, no matter how large, results in zero change in the quantity; vertical in appearance.
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Terms in this set (16)
the highly inelastic case of demand or supply in which a percentage change in price, no matter how large, results in zero change in the quantity; vertical in appearance.
zero inelasticity.
the percentage change in hours worked divided by the percentage change in wages.
wage elasticity of labor supply.
when the calculated elasticity is equal to one indicating that a change in the price of the good or service results in a proportional change in the quantity demanded or supplied.
unitary elasticity.
manner in which the tax burden is divided between buyers and sellers.
tax incidence.
percentage change in the quantity supplied divided by the percentage change in price.
price elasticity of supply.
percentage change in the quantity demanded of a good or service divided the percentage change in price.
price elasticity of demand
the relationship between the percent change in price resulting in a corresponding percentage change in the quantity demanded or supplied.
price elasticity.
the extremely elastic situation of demand or supply where quantity changes by an infinite amount in response to any change in price; horizontal in appearance.
infinite or perfect elasticity.
when the elasticity of supply is less than one, indicating that a 1 percent increase in price paid to the firm will result in a less than 1 percent increase in production by the firm; this indicates a low responsiveness of the firm to price increases (and vice versa if prices drop).
inelastic supply.
when the elasticity of demand is less than one, indicating that a 1 percent increase in price paid by the consumer leads to less than a 1 percent change in purchases (and vice versa); this indicates a low responsiveness by consumers to price changes.
inelastic demand