Ch 1 · Theory of Demand and Supply

5 concept points · 4 formulas · 4 exam-critical points.

⭐ Important points (exam-critical)

• ⭐Giffen and Veblen goods are exceptions to the Law of Demand.
• ⭐If Ed > 1 elastic, Ed = 1 unitary, Ed < 1 inelastic, Ed = 0 perfectly inelastic.
• ⭐Inferior goods have negative income elasticity.
• ⭐Cross elasticity: positive for substitutes, negative for complements.