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ELASTIC DEMAND: Relatively small changes in demand price cause relatively larger changes in quantity demanded. Elastic demand means that changes in the quantity demanded are relatively responsive to changes in the demand price. An elastic demand has a coefficient of elasticity greater than one (the negative value is ignored). You might want to compare elastic demand to inelastic demand, elastic supply, and inelastic supply.
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Lesson 4: Production Possibilities | Unit 4: Analysis
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Page: 17 of 24
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Topic:
Resource Quantity and Quality
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Three ways to increase resource quantity.- Labor: Labor increases through (1) natural population growth, (2) immigration from other nations, and (3) more participation and fewer nonworkers.
- Capital: The key to getting more capital is investment, giving up satisfaction today to get capital tomorrow.
- Materials: The key to increasing their quantity is exploration. Exploration is best illustrated by digging or drilling into the Earth's crust in search of mineral or fossil fuel deposits.
Two ways to increase resource quality.- Education-The Quality of Labor: Education increases the quality of labor resources. Better educated workers are more productive workers.
- Education can be formal, sitting-in-a-classroom or informal, on-the-job-training experience. Both are valuable methods of increasing the quality labor.
- Technology-The Quality of Capital: Technology is the knowledge and information society as a whole possesses concerning the production of goods and services. Better technology enables more production.
- Technology concerns all aspects of production, but it is often seen as an improvement in the quality of capital.
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MONOPOLISTIC COMPETITION, DEMAND The demand curve for the output produced by a monopolistically competitive firm is relatively elastic. The firm can sell a wide range of output within a relatively narrow range of prices. As a price maker, the firm has some ability (not much, but some) to control price. The demand curve is negatively sloped, but relatively elastic, because each firm produces a slightly differentiated product, but faces competition from a large number of very, very close substitutes.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club wanting to buy either one of those memory foam pillows or a remote controlled train set. Be on the lookout for broken fingernail clippers.
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This isn't me! What am I?
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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"Expect people to be better than they are; it helps them to become better. But don't be disappointed when they're not; it helps them to keep trying." -- Merry Browne, Author
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LBO
Leveraged Buyout
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