AP Microeconomics Elasticity — practice questions

1. Table 5.1 sorts elasticity into three categories based on the size of the ratio. 2. An elastic demand or supply is one where the elasticity value is greater than one. 3. A value less than one is inelastic, and a value of exactly one is unitary, so neither describes elastic. 4. Zero elasticity is a separate extreme case, not the ordinary elastic category. _Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.1 | Price Elasticity of Demand and Price Elasticity of Supply_

1. Inelastic demand or supply describes low responsiveness of quantity to a price change. 2. Table 5.1 assigns this label whenever the calculated elasticity value is less than one. 3. A value greater than one is elastic, and exactly one is unitary, so neither matches inelastic. 4. Infinite elasticity is the separate extreme case of perfect elasticity, not ordinary inelastic demand. _Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.1 | Price Elasticity of Demand and Price Elasticity of Supply_

1. Table 5.1 defines this case as when the percentage change in quantity equals the percentage change in price. 2. That proportional one-to-one response is called unitary elasticity. 3. Infinite elasticity and perfect inelasticity are the two extreme polar cases, not a proportional response. 4. Cross-price elasticity relates the price of one good to the quantity demanded of a different good, not a single good's own price and quantity. _Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.1 | Price Elasticity of Demand and Price Elasticity of Supply_