Demand and Price Elasticity

When replacing a certain item with with a less costly item is an example of

• the substitution effect 

• the income effect 

• demand elasticity 

• complements 

when consumers have a need for a product that is urgent 

• the demand curve is inelastic 

• the demand curve is elastic 

• the demand curve is complementary 

• the demand curve is unit demand 

Describes very little a change in demand with a large change in price 

• elastic 

• inelastic 

• demand curve 

• price 

Change in quantity demanded due to a change in price that alters a consumers real income 

• elasticity 

• inelastic 

• income effect 

• total expenditures 

Match the following definitions to the correct term.

• Unit Elastic

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

• Elasticity

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

• Demand Elasticity

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

• Inelastic

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

• Elastic

• General measure of responsiveness (cause and effect relationship)

Describe the demand for necessities.

• Demand is elastic

• Demand is volatile

• Demand is inelastic

• Demand is unpredictable

​ (a)   demand - price changes have little effect on the quantity you buy.

​ (b)   demand - price changes have a significant effect on the quantity you buy.

• Inelastic

• Elastic

​ ​ ​ (a)   demand means that a change in price causes a large or big change in quantity. People are very influenced by changes in price.

• elastic

• Inelastic

• high

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