1. Price elasticity of demand can be described as the responsiveness of  for a good or service, following a change in   .  It is calculated by % change in   / % change in . 

 price  quantity demanded  price  quantity demanded  demand  demand 

2. Price elasticity of supply can be described as the responsiveness of  for a product, following a change in   .  It is calculated by % change in   /   .

 price  % change in price  price  quantity supplied  supplied  supplied  quantity supplied 

3.   (YED) can be described as the responsiveness of  for a good or service, following a change in  .  It is calculated by % change in  / % change in .

quantity demanded  demand  Income elasticity of demand  demand  income  income quantity demanded price 

4. Agricultural products are normally PES   , while manufactured goods normally have a PES greater than  .  This is because it is assumed that manufactured goods find it easier to substitute   towards the production of different products more easily.

 1  0  factor rewards  factors of production  elastic  inelastic 

5. Luxury goods and services are normally PED  , while necessity goods normally have a PED lower than  .

 speculative  1  0  highly elastic  elastic 

6. In normal circumstances primary products have the     PED, followed by manufactured goods and then    , which are usually the most PED elastic.

 lowest  highest  services  luxury goods 

7. Firms operating at full capacity will normally find that the products they produce are highly PES   , while the PES elasticity for a firm will rise as the available  increases.

 elastic  inelastic  unitary  capacity 

8. Firms producing a PED inelastic good will find that their revenue     when prices rise and     when prices fall.  Firms producing a PED elastic good will find that there revenue     when prices rise and     when prices fall.  Firms producing goods which are PED unitary will see revenue     when there is a change in price.

 unchanged  is unaffected  rise  falls  fall  rises  remains constant