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22 Cards in this Set
- Front
- Back
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Price Ceilings
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A government imposed maximum price in a market.
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Short Side of the Market
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The smaller quantity supplied and quantity demanded at a particular price.
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Shortage
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An excess demand not eliminated by a rise in price, so that quantity demanded continues to exceed quantity supplied.
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Black Market
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A market in which goods are sold illegally at a price above the legal ceiling.
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Rent Controls
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Government imposed maximum rents on apartments and homes
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Price Floor
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A govenment imposed minimum price in a market.
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Surplus
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An excess supply not eliminated by a fall in price, so that quantity supplied continues to exceed quantity demanded.
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Price Elasticity of Demand
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The sensitivity of quantity demanded to price: the percent of change in quantity demanded caused by a 1-percent change in price.
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Inelastic Demand
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A price elasticity of demand with absolute value between 0 and 1.
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Perfectly Inelastic Demand
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A price elasticity of demand equal to 0.
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Elastic Demand
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A price elasticity of demand with absolute value greater than 1.
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Perfectly (infinitely) Elastic Demand
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A price elasticity of demand approaching minus infinity.
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Unitary Elastic Demand
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A price elasticity of demand equal to -1.
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Short-run Elasticity
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An elasticity measured just a short time after a price change.
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Long-run elasticity
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An elasticity measured a year or more after a price change.
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Income Elasticity of Demand
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The percentage change in quantity demanded caused by a 1-percent change in income.
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Economic Necessity
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A good with an income elasticity of demand between 0 and 1.
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Economic Luxury
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A good with an income elasticity of demand greater than 1.
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Cross-price Elasticity of Demand
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The percentage change in the quantity demanded of one good caused by a 1-percent change in the price of another good.
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Price Elasticity of Supply
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The percentage change in quantity supplied of a good or service caused by a 1-percent change in its price.
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Incidence
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The division of a tax payment between buyers and sellers, determined by comparing the new (after tax) and old (pretax) market equilibriums.
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Tax Shifting
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The process by which some or all of a tax imposed on one side of a market ends up being paid by the other side o the market.
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