4.3 - Elasticity of Demand

Match the following definitions to the correct term.

• Demand Elasticity

• When a given change in price causes a relatively larger change in quantity demanded

• Inelastic

• Extent to which a change in price causes a change in quantity demanded, aka whether it is a big or small change

• Elasticity

• General measure of responsiveness (cause and effect relationship)

• Elastic

• When a given change in price causes a proportional change in quantity demanded

• Unit Elastic

• When a given change in price causes a relatively smaller change in quantity demanded

True or False: Elasticity is a concept that is only applied to the concept of demand.

• True

• False

Is the following example one for elastic or inelastic demand: Green beans and other veggies impacted by the season.

• Elastic

• Inelastic

Is the following example one for elastic or inelastic demand: Gasoline prices skyrocket.

• Elastic

• Inelastic

True or False: Unit elasticity is like a middle ground between elastic and inelastic.

• True

• False

When we have to shift the demand curve due to changes other than price, what kind of graph will we be making?

• Change in Quantity Demanded

• Change in Quantity Supplied

• Change in Demand

• Change in Supply

When we do not shift the demand curve, but only move the points along the curve because of a change in price, what kind of graph will we be drawing?

• Change in Quantity Demanded

• Change in Quantity Supplied

• Change in Demand

• Change in Supply

Which of the following is NOT one of the reasons for a change in demand?

• Consumer Income

• Substitution Effect

• Expectations

• Number of Consumers

Which of the following is NOT one of the questions to ask yourself when determining demand elasticity?

• Can purchase be delayed?

• Are there substitues available?

• Does the purchase use a large portion of the income?

• None of the above.

We find ___________ by multiplying the price of a product by the quantity demanded for any point along the demand curve?

• Demand Elasticity

• Total Expenditure

• Demand Inelasticity

• Unit Elastic Demand