Econ103 Discussion02 - September 3 2010 Econ 103...

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https://netfiles.uiuc.edu/ebagby2/econ103 September 3 2010 Econ 103 — Macroeconomic Principles TA: Emilie Bagby Read Readings 1 & 2 (Internet) & Chapters 1(p. 8-10), 4 (p.83-87) & 5 Reminder : Quiz 1 next class (September 10) 1. Elasticity (NOT in the book! See Reading 1 from webpage) 2.1 Some Definitions Price Elasticity of Demand - Measures the sensitivity of consumer’s demand to a change in price Income Elasticity of Demand - Measures the sensitivity of consumer’s demand to a change in income Price Elasticity of Supply - Measures the sensitivity of producer’s supply to a change in price Note: For elasticity of supply use Q S instead of Q D , and for income elasticity use Y instead of P 2.2 Inelastic vs. Elastic vs. Unit Elastic Demand What is perfectly inelastic demand? What about perfectly elastic demand? 2.3 Elasticity and Revenue (NOT profit) 3. Tax (Reading 1) 5.1 Tax burden: how much each agent effectively pays of a tax - Who pays the tax? It depends on the elasticity of demand
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This note was uploaded on 03/10/2011 for the course ECON 103 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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Econ103 Discussion02 - September 3 2010 Econ 103...

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