A coefficient is the number in front of a variable. For example, consider the expression '2y'
y is the variable
2 is the coefficient
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an elasticity of coefficient of -1 means what
It's an elasticity coefficient of demand: deltaD/deltaP When the coefficient is >1 it is an elastic demand When the coefficient is <1 it is a nonelastic demand
The Gini coefficient is a measure of equality expressed as a value between 1 and 0. 0 represents perfect equality and 1 represents perfect inequality. Therefore a rise in the Gini coefficient results in an increase in inequality.
To calculate the Gini coefficient for income distribution, you need to plot a Lorenz curve showing the cumulative share of income against the cumulative share of the population. The Gini coefficient is then calculated as the area between the Lorenz curve and the line of perfect equality, divided by the total area under the line of perfect equality. The Gini coefficient ranges from 0 (perfect equality) to 1 (perfect inequality).
True or False: A cross elasticity of demand coefficient of +2.5 indicates that the two products are substitutes.