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19 Cards in this Set
- Front
- Back
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Allocative Efficiency
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term for resourves being deployed to produce just the right amount of each product to statisfy society's wants
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Capitalism
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an economic system where supplu and demand determine prices
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Circluar Flow Diagram
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diagram that shows how households and firms are related by the exchange of resources and products
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Command Economy
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economy in which the central government dictates what will or will not be produced and who gets what
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The law of Demand
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law that states that when th price of a product increases the quantity demanded decreases, ceteris paribus
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Law of Supply
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law that states that when te prie of a product increases, th q supplied increases, ceteris paribus
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Mixed Economy
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a blend of government commands and captialism
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market
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place where byers and sellers meet to exchange goods and services
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quantitly demanded
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has an inverse relationship with changes in the price of a particular good
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quantity supplied
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has a direct relationship with changes in the price of a particular good
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changes in Demand (supply)
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shift in demand (supply) due to non-price factors or determinants
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Equilibrium Price
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price at which quantity supplied equals quantity demanded
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Price Ceiling
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established below the equilibrium price
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PRice Floor
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established above the equilibrium price
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F: Price Elasticity of Demand
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% change in Quantity demanded/% change in price
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F:Numerical Coefficienct of Elasticity
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Change in Q(p1 + p2)/2)/(change in P (q1 + q2)/2
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F:Cross Price Elasticity of demand
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% change in Q demended of Product Y/ Change Price of {rpduct X
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F:Income Elasticity of Demand:
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% change in Q demanded/ % Change in consumer Income
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F:Price Elasticity of Supply
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% change in Q supplied / % change in price
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