Lesson 3.03 Try It 1

Vocabulary

Practice the vocabulary words from the lesson.

1. If we make more money we will purchase more of these kinds of goods.
   Answer: Normal good

2. When our income decreases we purchase more of these goods because it is more cost effective.
   Answer: Inferior good

3. A measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as price.
   Answer: Elasticity

4. The extent to which a change in price causes a change in the quantity demanded.
   Answer: Demanded elasticity

5. When a given change in price causes a relatively larger change in quantity demanded.
   Answer: Elastic

6. A given change in price causes a relatively smaller change in the quantity demanded.
   Answer: Inelastic

7. A given change in price causes a proportional change in quantity demanded.
   Answer: Unit elastic