What is the definition of an inferior good?
Good that happens when demand falls an income rises; vice versa.
Good that happens when demand increases and income increases as well; vice versa.
What type of goods are considered elastic goods?
Normal luxuries and normal necessities
Normal luxuries and superior goods
What is the formula for XeD?
%change in qty demanded for product x/ %change in price for product y
%change in qty demanded/ %change in income
What is the formula for PeD?
%change in qty demanded/ %change in price
%change in qty demanded/%change in income
What shifts PeS?
Stocks, Capital labor, Capacity and Time
Stocks, Capacity, Time and Chance
Stocks, Interest Rates, Time and Chance
What does a complement represent?
When the increase in demand of good A leads to the increase in demand of good B (If the demand for iphones increases, the demand for iphone cases will also increase).
When good A substitutes good B (because price of good A increases, the demand for good B will increase).
What would be an inelastic good?
Normal necessities
Macbook Pro
Tickets for a soccer match
Short-distance flights
What does a rectangular hyperbole represent?
Unit elasticity along the curve
Price elasticity in supply
Price elasticity in demand
What does it mean when you graph a line in a price elasticity graph, that starts in the y- axis?
Inelastic
Elastic
Unit Elastic
Perfectly inelastic
What kind of profit is a firm making when their ATC= their AR?
Supernormal
Abnormal
