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20 Cards in this Set
- Front
- Back
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Chapter 5 |
Elasticity and its Application |
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elasticity |
a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants |
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price elasticity of demand |
a measure of how much the quantity demanded of a good responds to a change in the price that good, computed as the percentage change in quantity demanded divided by the percentage in price |
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total revenue |
the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold |
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income elasticy of demand |
a measure of how much the quantity demanded of a good responds a change in consumers' income, computed as the percentage change in quantity demanded divided by the percentage change in income |
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cross-price elasticity of demand |
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 change in quantity demanded of the first good divided by the percentage change in the price of the second good |
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price of elasticity of supply |
a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in the price |
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Chapter 6 |
Supply, Demand, and Government Policies |
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price ceiling |
a legal maximum on the price at which a good can be sold |
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price floor |
a legal minimum on the price at which a good can be sold |
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tax incidence |
the manner in which the burden of a tax is shared among participants in a market |
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Consumers, Producers, and the Efficiency of Markets |
Chapter 7 |
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welfare economics |
the study of how the allocation of resources affects economic well being |
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willingness to pay |
the maximum amount that a buyer will pay for a good |
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consumer surplus |
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it |
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cost |
the value of something a seller must give up to produce something |
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producer surplus |
the amount a seller is paid for a good minus the seller's cost of providing it |
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equality |
the property of distributing economic prosperity uniformly among the members of society |
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Chapter 8 |
Application: The Costs of Taxation |
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deadweight loss |
the fall in total surplus that results from a market distortion, such as a tax |
