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22 Cards in this Set

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