AP/IB Economics
Mankiw Chapter 5: The Elasticity of Demand (PED)
Guided Outline Textbook Pages 89-94
Main Ideas
Elasticity
Price elasticity of demand
[PED]
Determinants of PED
Perfectly Inelastic demand
Inelastic demand
Notes, definitions, examples, diagrams, formulas
Main Ideas
Unit elastic demand
Elastic Demand
Perfectly Elastic Demand
Two formulas to calculate
PED:
Percentage Change
The Midpoint Formula
Notes, definitions, examples, diagrams, formulas
AP/IB Economics
Mankiw Chapter 5: Revenue and Other Elasticities of Demand
Guided Outline Textbook Pages 94-99
http://www.tutor2u.net/quiz/economics/default.asp enter “Elasticity of Demand Quiz”
Main Ideas
What is total revenue?
How does elasticity impact
total revenue when price
changes?
inelastic demand
elastic demand
unit elastic demand
Draw a graph which shows the
different elasticities along a
linear demand curve.
Notes, definitions, examples, diagrams, formulas
Main Ideas
What is income elasticity of
demand [YED], and what does
it help us determine?
What is cross-price elasticity
of demand [XED], and what
does it help us determine?
Notes, definitions, examples, diagrams, formulas
AP/IB Economics
Chapter 5: Price Elasticity of Supply
Guided Outline Textbook Pages 99-102
http://www.tutor2u.net/quiz/economics/default.asp enter “Elasticity of Supply Quiz”
Main Ideas
Price elasticity of supply [PES]
Determinants of PES
Formula
Diagrams with different
supply elasticities
Notes, definitions, examples, diagrams, formulas
AP/IB Economics
Chapter 6: Taxes
Guided Outline Mankiw Pages 123-130
Main Ideas
Define tax incidence.
What does a tax on sellers
do? Why?
Who ends up paying the tax?
Explain
What does a tax on buyers
do? Why?
Who ends up paying the sales
tax? Explain
Notes, definitions, examples, diagrams, formulas
Main Ideas
Consider how relative
elasticities impact the
incidence of taxation:
When supply is more elastic
than demand, who pays
more of the tax? Why?
When demand is more
elastic than supply, who
pays more of the tax?
Why?
Explain, then the incidence
of taxation on luxury goods.
Notes, definitions, examples, diagrams, formulas