PSU Econ 102 Exam 2 ACTUAL EXAM COMPLETE 70
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED
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Elasticity ✔✔CORRECT ANSWER✔✔Measure of the
responsiveness of buyers and sellers to changes in price
or income
Price Elasticity of Demand ✔✔CORRECT
ANSWER✔✔How quantity demanded responds to a price
change
Price Elasticity of Supply ✔✔CORRECT ANSWER✔✔How
quantity supplied responds to a price change
Income Elasticity of Demand ✔✔CORRECT
ANSWER✔✔How quantity demanded responds to a
change in income
, Cross-Price Elasticity of Demand ✔✔CORRECT
ANSWER✔✔How quantity demanded responds to a price
change of another good
Elastic goods ✔✔CORRECT ANSWER✔✔Large response in
consumption to a price change
Inelastic goods ✔✔CORRECT ANSWER✔✔Small response
in consumption to a price change
Determinants of PED ✔✔CORRECT ANSWER✔✔(1)
Availability of Substitutes
(2) Share of Budget Spent on the Good
(3) Necessities vs Luxuries
(4) Time and Adjustment Process
PED formula ✔✔CORRECT ANSWER✔✔[Change in Q /
Average Q] / [Change in P / Average P]
(always negative)
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