Philip is a resident of the great state of New York, but has inspired and motivated fellow Roger students through online forums and social media platforms across the globe. Philip has already passed FAR, AUD, and is now gearing up for BEC.
Hello! I am back with another blog. Took a week off. Been battling some health stuff, but all is good, because as I see it, I’m still alive and standing tall! Today, I want to talk about my journey into BEC and a tool I already created to help me with learning the Elasticity of Demand equations and theory.In a previous blog, I discussed how making my own charts and tables really helped my ability to learn the material. For instance in FAR, I made a chart for the Statement of Cash flows for public companies, government and not for profit. I really think that this chart I came up with will really help you not only learn the material but quickly and easily memorize it as well. Granted, Roger laid this out extremely well in the book, but I like to write as I study. Below is the chart I made, though in its real form it was made with my sharpie marker and a piece of paper. You are all free to use it and change it as you need.
|Elasticity of Demand
|Simple Equation:% Change QD/% Change in $
ARC Equation:(Change QD/Avg QD)/(Change $/Avg $)
|% Change QD/% Change in Income
|% Change QD of Prod X/% Change $ of Prod Y
|Pt of Inflection
|>1.0 Elastic ( $ up; Tot Rev down)<1.0-Inelastic($ up; Tot Rev up)=0-Unitary
|>0: Normal Good(Inc up, QD up; Direct)<0: Inferior Good(Inc up, QD down; Inverse)
|>0: Substitute<0: Complimentary=0: unrelated
For the most part, you can quickly see that this puts a lot of info into a very short and concise chart. Now for the fun stuff. In a previous blog, I also noted that to really gain efficiencies while studying, focus on the differences. For instance, if you look at the Pt of Inflection, we only need to know that out of the three equations, Price Elasticity has an inflection of 1.0, all else if 0. BAM! There are several other tricks with this chart too. For instance, for Price and Income Elasticity, the denominator will always be the % change in the name of the equation. So you already have half of the equation memorized by just learning the name of the equation.
I hope that this study trick and tool helps you with your studies. Even though this is the CPA Exam, we can still find ways to enhance and maximize our time studying to make it a much easier process. Best of luck as we move forward thru this process together!