3.03 Elasticity and Graphing Demand

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Vocabulary Matching

Match the vocabulary words to their descriptions.

Descriptions:

1. If we make more money, we will purchase more of these kinds of goods.
2. When our income decreases, we purchase more of these goods because it is more cost effective.
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.
4. The extent to which a change in price causes a change in the quantity demanded.
5. When a given change in price causes a relatively larger change in quantity demanded.
6. A given change in price causes a relatively smaller change in the quantity demanded.
7. A given change in price causes a proportional change in quantity demanded.

Terms:

• Demanded elasticity
• Normal good
• Inelastic
• Unit elastic
• Inferior good
• Elastic
• Elasticity

Answers:

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

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