HCI 2024 H2 Econs Summary Tables

HWA CHONG INSTITUTION Year Two H2 Economics 2024 Summary Tables: Demand, Supply and Elasticity Concepts © Hwa Chong Institution Economics Unit. All Rights Reserved. Students' Copy A.1 Appendix A1: Summary Table for Demand, Supply and Elasticity Concepts A List of Acronyms that Help you to Remember Key Determinants of Demand, Supply, Elasticities of Demand and Supply DEMAND Refers to the quantities of a good or service that consumers are willing and able to buy at various prices over a given period of time, ceteris paribus. SUPPLY Refers to the quantities of a good or service that producers are willing and able to offer for sale at various prices over a given period of time, ceteris paribus. PRICE ELASTICITY OF DEMAND INCOME ELASTICIY OF DEMAND PRICE ELASTICITY OF SUPPLY P-TIDE CPPSE SNIT NL SNIT Price of related goods (substitutes and complements) Cost of production (costs of inputs, technology, productivity, taxes & subsidies) Substitutes Nature of goods Spare capacity Taste & preference (influenced by fashion/fad, government policies, advertising and seasons) Changes in the Prices of Related Goods (competitive supply, joint supply) Necessities Level of income Nature of production (length of production period and ease of factor substitution) Income (purchasing power affected by economic performance such as GDP growth rates) Changes in the Number of Producers Proportion of Income spent Inventories /stocks Demographics (size, age and sex composition) Supply Shocks (Nature – weather & natural disasters; Man- made – wars, riots; terrorism) Time period Time period Expectations (expectation of future income/prices and speculation) Expectations (Future outlook in terms of profitability)

HWA CHONG INSTITUTION Year Two H2 Economics 2024 Summary Tables: Demand, Supply and Elasticity Concepts © Hwa Chong Institution Economics Unit. All Rights Reserved. Students' Copy A.2 Appendix A2: Summary Table for Demand and Supply Elasticity Concepts ELASTICITIES OF DEMAND PRICE ELASTICITY OF SUPPLY Price elasticity of Demand Income elasticity of Demand Cross elasticity of Demand Price elasticity of Supply Definition PED measures the responsiveness of quantity demanded of a good to changes in its own price , ceteris paribus. YED measures the responsiveness of demand of a good to changes in income, ceteris paribus. CED measures the responsiveness of demand of a good X to changes in price of good Y , ceteris paribus. PES measures the responsiveness of quantity supplied of a good to changes in its own price , ceteris paribus. Note: Do not forget to include the ‘ceteris paribus’ condition in the definition. Formula % change in Qd % change in its own price % change in Qd % change in income % change in QdX % change in PY % change in Qs % change in its own price Sign Always negative due to the law of demand -