1. Price elasticity of demand measures the responsiveness of quantity demanded of a product to a change in the price of that product.

a. State the (midpoint) formula for calculating price elasticity of demand.

b. Describe elastic demand.

c. Describe inelastic demand.

d. Describe unit elastic demand.

e. Explain when demand would be perfectly elastic.

f. Explain when demand would be perfectly inelastic.

g. Explain how price elasticity of demand affects the relationship between price and total revenue.

2. Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.

a. State the formula for calculating cross elasticity of demand.

b. Explain how cross elasticity of demand is used.

3. Price elasticity of supply measures the responsiveness of quantity supplied of a good to a change in the price of that good.

a. State the formula for calculating price elasticity of supply.

b. Describe elastic supply.

c. Describe inelastic supply.

d. Describe unit elastic supply.

e. Explain when supply would be perfectly elastic.

f. Explain when supply would be perfectly inelastic.

g. Explain how price elasticity of supply changes over time.

4. The laws of supply and demand determine who actually pays a tax.

a. Describe the conditions under which consumers will pay the full tax.

b. Describe the conditions under which producers will pay the full tax.

c.Explain how the government can maximize tax revenues.