Economics Exam 1 study

elastic

changes based on price

normal goods when price decreases

demand decreases

greater than 1

elastic

inferior good w/increased income

fall in demand

example of inelastic demand

gasoline, food, medicine

normal goods w/increased income

higher demand

unit elastic

when the percentage change in price and quantity demanded are the same

price of elasticity of demand

% change in quantity demanded / % change in price

Implicit costs are

"payments" for self-employed resources or loss of opportunities

CS

ASBP

PS

BDAP

Inelastic

Price doesn't affect it. "Stays the same"

economic profit

TR - explicit costs - implicit costs

Explicit costs are

actual monetary payments for resources purchased or actual money, rent ect.

Less than 1

inelastic

off brand items

inferior good

example of elastic demand

meat, soda, cookies, clothing

on brand goods

normal goods