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GLOBALIZATION: The generalized expansion of international economic activity which includes increased international trade, growth of international investment (foreign investment) and international migration, and increased proliferation of technology among countries. Globalization is the increasing world-wide integration of markets for goods, services, labor, and capital. It is an ongoing process that started several centuries ago. However, most people would agree that today we are in a period of rapid globalization as international economic activity has accelerated in the last 200 years or so.
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                           ELASTIC: The general relation between two variables in which relatively small changes in one variable (A) cause relatively large changes in another variable (B). Small changes in variable A cause relatively large changes in variable B or the percentage change in variable B is larger than the percentage change in variable A. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Elastic is one of two general elasticity relations between two variables. The other is inelastic. An elastic relation between two variables is a very responsive, or stretchable, relation. The elastic relation is most often directed toward demand and supply in terms of the price elasticity of demand and the price elasticity of supply. In this context, demand or supply is said to be elastic if the percentage change in quantity is larger than the percentage change in price. This means that buyers or sellers are responsive to price changes.However, other relations can also be thought of as elastic. For example, demand might be elastic relative to income. In this case, relatively small changes in income can trigger relatively large changes in demand. Demand and SupplyConsider the two sides of the market.- Demand: Elastic demand exists if relatively small changes in price cause relatively large changes in quantity demanded. Elastic demand means that changes in the quantity demanded are relatively responsive to changes in the price. An elastic demand has a coefficient of elasticity greater than one (with the negative value ignored).
- Supply: Elastic supply exists if relatively small changes in price cause relatively large changes in quantity supplied. Elastic supply means that changes in the quantity supplied are relatively responsive to changes in the price. An elastic supply also has a coefficient of elasticity greater than one.
Perfect and RelativeAn elastic relation can fall into one of two categories--perfectly elastic and relatively elastic.- Perfectly Elastic: Perfectly elastic means an infinitesimally small change in price results in an infinitely large change in quantity demanded or supplied. This elasticity alternative exists when the price is fixed, that is, an infinite range of quantities is associated with the same price. This is the extreme, limiting case of elastic. Perfectly elastic demand can occur, in theory, when buyers have the choice among a large number of perfect substitutes-in-consumption. In an analogous way, perfectly elastic supply can occur when producers have the ability to switch resources among a large number of perfect substitutes-in-production.
- Relatively Elastic: Relatively elastic means that relatively small changes in price cause relatively larger changes in quantity. Quantity is very responsive to price, but not infinitely so. The percentage change in quantity is greater than the percentage change in price. Relatively elastic demand occurs when buyers have the choice among a large number of close but not perfect substitutes-in-consumption. In an analogous way, relatively elastic supply occurs when producers have the ability to switch resources among a large number of close but not perfect substitutes-in-production.
Recommended Citation:ELASTIC, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: May 29, 2023].
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BROWN PRAGMATOX
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Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club hoping to buy either a coffee cup commemorating last Friday (you know why) or a wall poster commemorating the first day of spring. Be on the lookout for high interest rates.
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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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COMECON
Council for Mutual Economic Assistance
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