資源描述：
《10e_Essay_Test_Bank_Ch_6_FINAL》由會(huì)員上傳分享，免費(fèi)在線閱讀，更多相關(guān)內(nèi)容在教育資源-天天文庫(kù)。
1、Chapter6:DescribingSupplyandDemand:ElasticitiesEssayQuestions1.Definethepriceelasticityofdemandandthepriceelasticityofsupply.Whatisthedifferencebetweenelasticandinelasticdemand?Answer:Thepriceelasticityofdemandisameasureoftheresponsivenessofquantitydemandedtochangesinprice.
2、Specifically,thepriceelasticityofdemandisthepercentagechangeinquantitydemandeddividedbythepercentagechangeinprice.Thepriceelasticityofsupplyisameasureoftheresponsivenessofquantitysuppliedtochangesinprice.Specifically,thepriceelasticityofsupplyisthepercentagechangeinquantity
3、supplieddividedbythepercentagechangeinprice.Thedifferencebetweenelasticandinelasticdemandrelatestowhetherthepercentagechangeinquantityislargerorsmallerthanthepercentagechangeinprice.Specifically,demandiselasticifthepercentagechangeinquantityisgreaterthanthepercentagechangei
4、nprice.Demandisinelasticifthepercentagechangeinquantityislessthanthepercentagechangeinprice.2.Boththeslopeofthedemandcurveandtheelasticityofdemandaremeasuresofhowconsumersaltertheirquantitiesdemandedinresponsetochangesinprice.Howarethetwoconceptsdifferentfromeachother?Given
5、anegativelyslopedstraight-linedemandcurve,howwillslopeandelasticitydiffer?Givenaverticalorhorizontaldemandcurve,howwilltheydiffer?Answer:Theslopeofthedemandcurverelatesabsolutechangesinpriceandquantitydemanded.Elasticityisaratioofpercentagechanges.Whereastheslopeofthedemand
6、curvewilldependontheunitsinwhichpriceandquantityaremeasured,elasticityisapurenumberandisindependentoftheunitsinwhichpriceandquantityaremeasured.Ifthedemandcurveisastraightline,itsslopeisconstant.However,theelasticityofdemandalonganegativelyslopedstraight-linedemandcurvechan
7、gesateverypoint.Itincreasesaswemoveuponthedemandcurve(higherpricesandlowerquantities),anddecreasesaswemovedown(lowerpricesandhigherquantities).Finallyinmeasuringslope,thechangeinpriceisinthenumeratorandthechangeinquantityisinthedenominator.Inthecaseofelasticity,thepercentag
8、echangeinquantityisinthenumeratorandthepercentagechangeinpriceisinthedenominator.H
