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Unformatted text preview: change in demand - changes inc consumer income will cause the demand curbe to shift consumer surplus is the right triangle of a curve perfectly inelastic curve is vertical prefectly elastic curve is horizontal calculation of elasticity (Qa-Qb) / ([Qa+Qb] / 2) (Pa-Pb) / ([Pa+Pb] / 2 formula above measures arc elasticity if greater than one elastic (greater than percentage change in price) if own-price elasticity equal to one unitary elastic (same as percentage change in price) less than one inelastic (less than percentage change in price) marginal rate of subsitution (MRS) MRS is always negative net income = income minus expenses equity - assets minus liabilities came up with concept of price elasticity...
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This note was uploaded on 03/25/2008 for the course AGEC 101 taught by Professor Capps during the Spring '08 term at Texas A&M.
- Spring '08