Google
Tuesday 
August 19, 2014 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
Today's Index
Yesterday's Index
182.9

Help us compile the AmosWEB Free Lunch Index. Tell us about your last lunch.

Skipped lunch altogether.
Bought by another.
Ate lunch at home.
Brought lunch from home.
Fast food drive through.
Fast food dine in.
All-you-can eat buffet.
Casual dining with tip.
Fancy upscale with tip.

More About the Index
Least favorite number?

0.
1.
7.
9.
13.
99.

CAPITAL ACCOUNT: One of two parts of a nation's balance of payments. The capital is a record of all purchases of physical and financial assets between a nation and the rest of the world in a given period, usually one year. On one side of the balance of payments ledger account are all of the foreign assets purchase by our domestic economy. On the other side of the ledger are all of our domestic assets purchased by foreign countries. The capital account is said to have a surplus if a nation's investments abroad are greater than foreign investments at home. In other words, if the good old U. S. of A. is buying up more assets in Mexico, Brazil, and Hungry, than Japanese, Germany, and Canada investors are buying up of good old U. S. assets, then we have a surplus. A deficit is the reverse.

Visit the GLOSS*arama


UNIT ELASTIC:

An elasticity alternative in which changes in one variable (usually price) cause equal proportional changes in another variable (usually quantity). In other words, any change in price, whether big or small, triggers exactly the same percentage change in quantity. Quantity changes match price changes. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Unit elastic is one of five elasticity alternatives. The other four are perfectly elastic, perfectly inelastic, relatively elastic, and relatively inelastic.
AlternativeCoefficient (E)
Perfectly ElasticE = ∞
Relatively Elastic1 < E < ∞
Unit ElasticE = 1
Relatively Inelastic0 < E < 1
Perfectly InelasticE = 0
Unit elastic means that any change in price causes an equal proportion change in quantity. Quantity changes are matched by price changes. More specifically, the percentage change in quantity is equal to the percentage change in price. Unit elastic demand occurs when buyers can choose from among a modest number of substitutes in the consumption of a good. In an analogous way, unit elastic supply occurs when sellers can choose among a modest number of substitutes in the production.

The chart to the right displays the five alternatives based on the coefficient of elasticity (E). In technical shorthand (which can be used by anyone with math symbols tattooed on their hands), the coefficient of elasticity (E) is given as:

E = 1

This technical shorthand works for both the price elasticity of demand and the price elasticity of supply, because the negative value of the price elasticity of demand is ignored. If the negative sign is not ignored, the price elasticity of demand is given by E = -1

Two Curves

Unit Elastic Curves

Unit elastic demand and supply are best understood and more easily seen with pictures. The blank graph presented here is ready and willing to display a unit elastic demand curve and a unit elastic supply curve. All this is needed is click the corresponding buttons labeled [Demand] and [Supply].

Notice that the unit elastic demand curve is, in fact, a curve (rather than a straight line), while the unit elastic supply curve is a straight line that originates from the origin. Both curves are configured such that a given percentage change in price is matched by an equal percentage change in quantity. The key for demand is that the slope of the curve is steep for high prices and small quantities and flat for low prices and large quantities. The key for supply is that the line goes through the origin. If the price is zero, so too is the quantity.

Examples Anyone?

While it would be useful to discuss a few examples of unit elastic demand and supply, such is not really possible. This is not due to any moral, religious, or philosophical objection to doing so. It is because that, unlike other elasticity alternatives, there is nothing particularly notable about goods that are unit elastic. Rather than a distinctive category, unit elastic is primarily a dividing line, a boundary, between elastic and inelastic. If the coefficient of elasticity is greater than one, then a good is elastic. If the coefficient of elasticity is less than one, then a good is inelastic. If the coefficient just happens to be exactly equal to one, then it is unit elastic. There is nothing intrinsic about a good in terms of either production or consumption that give rise to unit elastic.

<= UNILATERAL TRANSFERSUNIT OF ACCOUNT =>


Recommended Citation:

UNIT ELASTIC, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2014. [Accessed: August 19, 2014].


Check Out These Related Terms...

     | perfectly elastic | perfectly inelastic | relatively elastic | relatively inelastic | elasticity alternatives | elasticity alternatives, demand | elasticity alternatives, supply | elastic | elastic demand | elastic supply | inelastic | inelastic demand | inelastic supply |


Or For A Little Background...

     | elasticity | coefficient of elasticity | price elasticity of demand | supply | law of demand | demand curve | price elasticity of supply | supply | law of supply | supply curve |


And For Further Study...

     | elasticity and demand slope | elasticity and supply intercept | demand elasticity and total expenditure | price elasticity of demand | income elasticity of demand | cross elasticity of demand | elasticity determinants |


Search Again?

Back to the WEB*pedia



State of the ECONOMY

Unemployment
July 2014
6.2% Steady
Bureau of Labor Statistics

More Stats

PURPLE SMARPHIN
[What's This?]

Today, you are likely to spend a great deal of time at a going out of business sale hoping to buy either a T-shirt commemorating the 2000 Olympics or a genuine fake plastic Tiffany lamp. Be on the lookout for bottles of barbeque sauce that act TOO innocent.
Your Complete Scope

This isn't me! What am I?

Much of the $15 million used by the United States to finance the Louisiana Purchase from France was borrowed from European banks.
"In a restless, creative business with an emphasis on experiment and development, ideas are the lifeblood."

-- Richard Branson, Virgin Group founder

LTFV
Less Than Fair Value
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2014 AmosWEB*LLC
Send comments or questions to: WebMaster