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21 Cards in this Set
- Front
- Back
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queuing
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Waiting in line as a means of distributing goods and services; a nonprice rationing mechanism
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favored customers
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Those who receive special treatment from dealers during situations of excess demand
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ration coupons
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Tickets or coupons that entitle individuals to purchase a certain amount of a given product per month
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black market
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A market in which illegal trading takes place at market-determined prices
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elasticity
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A general concept used to quantify the response in one variable when another variable changes
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price elasticity of demand
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The ratio of the % of change in quantity demanded to the % of change in price; measures the responsiveness of demand to changes in price.
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perfectly inelastic demand
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Demand in which quantity demanded does not respond at all to a change in price
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inelastic demand
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Demand that responds somewhat, but not a great deal, to changes in price. Inelastic demand always has a numerical value between zero and 1
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unitary elasticity
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A demand relationship in which the % change in quantity of a product demanded is the same as the % change in price in absolute value ( a demand elasticity of 1)
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elastic demand
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A demand relationship in which the % change in quantity demanded is larger in absolute value than the % change in price ( a demand elasticity with an absolute value great than 1)
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perfectly elastic demand
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Demand in which quantity demanded drops to zero at the slightest increase in price.
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price elasticity of demand=
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% change in quantity demanded / % change in price
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% change in quantity demanded
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Q²-Q¹/ Q¹ X 100%
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% change in price
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P²-P¹/ P¹ X 100%
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midpoint formula
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Q²-Q¹/ (Q²+Q¹)/ 2 X 100%
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income elasticity of demand
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% change in quantity demanded / % change in income
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cross price elasticity of demand
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a measure of the response of the quantity of one good demanded to a change in the price of another good
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cross price formula
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% change in quantity of Y demanded / % change in price of X
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elasticity of supply
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a measure of the response of quantity of a good supplied to a change in price of that good. Likely to be positive in output markets
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elasticity of labor supply
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a measure of the response of labor supplied to change in the price of labor
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price rationing
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The process by which the market system allocates goods and services to consumers when quantity demanded exceeds quantity supplied
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