Download - IB Econ Chapter 04 SG
-
5/28/2018 IB Econ Chapter 04 SG
1/6
Name: _______________________________
IB Economics Study Guide: Chapter 04Keyed to OxfordB!in" Second Edition
Elasticity: Describe the concept here.
Look forward in the chapter and complete this table by listing the varioutypes we study.
Elasticities of Demand Elasticities of Supply
PED
DEF:
Algebraic Expression:
Which variable is on TOP in that expression? ________________
Cause and Eect are ver! i"portant in Elasticit!# $ote that the process al%a!s startsthe base"ent# &in the deno"inator#' T(AT changes) and as a result the $*+E,ATOchanges# The relative si-e o the t%o changes is Elasticit!#
,A$.E o /A0*E1 o PED: Dra% a 2uic3 graph o each case#4ero 5et%een 4ero
and 66 Above 6 but not
undeined*ndeined o
7ininit!8
-
5/28/2018 IB Econ Chapter 04 SG
2/6
(o% "an! ite"s in the %orld are characteri-ed b! a PED o -ero? _______
(o% "an! ite"s have PED o 7ininit!8? ________
1tud! the 7,evenue 5oxes8 discussion on pages 9;
-
5/28/2018 IB Econ Chapter 04 SG
3/6
EVAL:*hat Items Should +overnment (ut a 'ax ,n% Explain using theconcept of (rice Elasticity of Demand.
XEDDEF:
Algebraic Expression:
Which variable is on TOP in that expression? ________________
-ED explains the """""""""""""""""""""""""""" between""""""""""""""""""""""""""""".
*ith -ED the sign is the key / unimportant to understandingits implications.
/circle one0
XED VALUE_____________ ___________ _________
____________ ___________ ______________ __________ _________
RELATIONSHIP
YED
DEF:
Algebraic Expression:
Which variable is on TOP in that expression? ________________
-
5/28/2018 IB Econ Chapter 04 SG
4/6
*ith 1ED the sign is important / unimportant to understandiits implications.
/circle one0
YED Summary TableLikely
Sign
Magnitude Notes
Normal GoodsNecessitiesInferior Goods
Engel Curvesshow that YED can change over ___________________ as a good
goes from being perceived as a __________________ good to an_________________
good, due to increasing standards of living.
PES --- the only one involving Supplier behavior
DEF:
Algebraic Expression:
Which variable is on TOP in that expression? ________________
,A$.E o /A0*E1 o PE1: Dra% a 2uic3 graph o each case#4ero 5et%een 4ero and
undeined
*ndeined or 7ininit!8
Ti"e Period Considered and PE1: Dra% a 2uic3 graph o each#
-
5/28/2018 IB Econ Chapter 04 SG
5/6
Toda! &""ediate' A short period o ti"e The 0ong ,un
For global commodities like wheat, you can sort of get as much as you want at the
world market price. Draw that situation and describe the apparent PES.
PES IS WEIRD .
Use figure .!" #$ %$m&le#e #'is #able. I( ea%' b$)* +ra, $(e )-y a)is a(+ #,$ +iffere(# su&&
%ures.
T'ese T,$ Su&&ly /ures are
b$#' #$#ally elas#i% 0PES 1 !2
T'ese #,$ Su&&ly /ures are
b$#' u(i# elas#i% eery,'ere
0PES 3 !2
T'ese #,$ Su&&ly /ures a
i(elas#i%4 PES 5 ! a# all &$i(#
-
5/28/2018 IB Econ Chapter 04 SG
6/6
Determinants of Price Elasticity of Supply
(ES /optional: example0 (ES /optional: example
&ow much the cost tomake an item increasesas output increases
!ost doesn2t increase: !ost does increase:
!apacity )ll being used already: Lots of unused mfg.capacity:
$obility of 3actors of(roduction
Immobile: $obile:
'ime (eriod !onsidered:long or short%
Long: Short:
'ype of good(rimary !ommodity: $anufactured item:
LAST WORD6
!"#$$$%hy are &eveloping Nations ften #it with Sudden, #uge &rops in %hat th
%orld %ill 'ay for (heir Main 'roducts)))
Explain and support with a graph.