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23 Cards in this Set
- Front
- Back
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Elasticity
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a measure of the responsivemess of quantity demanded or quantity supplied to one of its determinats
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Price elasticity of demand
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a measure of how much the quantity demanded of a good responds to a change in price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price
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Total Revenue
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the amount paid by buyers and received by seller of a good, computed as the price of the good times the quantity sold
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Income elasticity of demand
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a measure of how much the quantity demanded of a good responds to a change in consumers income, computed as the percentage change in quantity demanded divided by the percentage chnage in income
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Cross-Price elasticity of demand
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a measure of how much the quantity demanded of one good responds to a change in the price of another good. Computed as the percentage chagne in quantity demanded of the first good divided by the percentage change in the price of the second good
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Price elasticity of supply
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a measure of how much the quanitity supplued of a good responds to a change in the price of the good, computed as the percentage change in the quantity supplied divided by the percentage change in the price.
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Price ceiling
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a legal maximum on the price at which a good can be sold
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Price floor
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a legal minimim on the price at which a good can be sold
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tax incidence
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the manner in which the burden of a tax is shared among participants in a market
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Gross Domestic Product (GDP)
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the market value of all final goods and services produced within a country in a given period of time
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Consumption
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spending by households on goods and services with the exception of perchases of new housing
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investment
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spending on capital equipment, inventories, and structures, including household purchases of new housing
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government purchases
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spending on local goods and services by local, state, and federal governments
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net exports
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spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)
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nominal GDP
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the production of goods and services valued at current prices
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real GDP
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the production of goods and services valued at constant prices (base year)
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GDP deflator
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a measure of he price level calculated as the ratio of nominal GPD to real GPD time 100
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Consumer Price Index (CPI)
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a measure of the overall cost of the goods and services bought by a typical consumer
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inflation rate
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the percentage change in the price index from the preceding period
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Producer Price index
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a measure of the cost of a basket of goods and services bought by firms
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indexation
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the automatic correction of a dollar amount for the effects of inflation by law or contract
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Nominal interest rate
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the interest rate as usually reported without a correction for the effects of inflation
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Real interest rate
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the interest rate corrected for the effects of inflation
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