Elasticity and the encyclopedic size of economic concepts

One of the things I found most difficult about economics was the jargon that came with the discipline. This was probably the result of not having any economics background at the secondary school level which meant I kind of parachuted myself into economics. This would be a typical excuse for being a bit thick, if it wasn't for the fact that I came across Robert H. Frank's the Economic Naturalist and his comment about how this difficulty in acquiring basic economic principles is a wide spread trend. In that spirit I'd like to start writing some of these down, so that if memory fails, this blog can help.

I guess that as I'll come across each and anyone of these, I'll come back to the blog and write them down. I have to say, embarrassingly that wikipedia is hugely helpful with this type of query and that I will find myself going back there for definitions.

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Today's concept is Elasticity of price, substitution, and wealth (income + whatever else fill your pockets):

In practice: "A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. Usually these kinds of products are readily available in the market and a person may not necessarily need them in his or her daily life. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all."

Numerically:"In economics, elasticity is the ratio of the percent change in one variable to the percent change in another variable.(...).An "elastic" good is one whose price elasticity of demand has a magnitude greater than one. Similarly, "unit elastic" and "inelastic" describe goods with price elasticity having a magnitude of one and less than one respectively.

I always found it hilarious that I remembered the numerical difference between a normal, superior, inferior and even a Giffen good, but I never knew whether to call them elastic or inelastic... It's like having the cheese and a knife but not being able to explain to other people how to use each without maths...

FYI, every basic macro book has a definition of this!