click below
click below
Normal Size Small Size show me how
AP Econ unit 2 pt 2
Term | Definition |
---|---|
Market | A group of buyers and sellers of a particular good or service |
Normal Good | a good for which, other things being equal, an increase in income leads to an increase in demand |
Price ceiling | a legal maximum on the price at which a good can be sold |
price elasticity of demand | a measure of how much the quantity demanded of a good responds to a change in the price of that good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price |
price elasticity of supply | a measure of how much the quantity supplied of a good responds to a change in the prive of that good, computed as the percentage change in quantity supplied divided by the percentage change in price |
price floors | a legal minimum on the price at which a good can be sold |
producer surplus | the amount a seller is paid for a good minus the seller's cost of providing it |
Quantity Demanded | the amount of a good that buyers are willing and able to purchase |
Quantity supplied | the amount of a good that sellers are willing and able to sell |
shortage | a situation in which quantity demanded is greater than quantity supplied |
substitutes | two goods for which an increase in the price of one leads to an increase in the demand for the other |
supply curve | a graph of the relationship between the price of a good and the quantity supplied |
supply schedule | a table that shows the relationship between the price of a good and the quantity supplied |
surplus | a situation in which quantity supplied is greater than the quantity demanded |
tariff | a tax on goods produced abroad and sold domestically |
tax incidence | the manner in which the burden of a tax is shared among participants in the market |
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 |
Willingness to pay | the maximum amount that a buyer will pay for a good |