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chapter 5
study for miniexam
11
Economics
Undergraduate 1
06/25/2008

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Term
price elasticity of demand
Definition
the ration of the percent change in the quantity demanded of a product to a percentage change in its price
Term
elastic demand
Definition
a condition in which the percentage change in the quantity demanded is greater than the percentage change in price
Term
total revenue
Definition
the total number of dollars a firm earns from the sale of a good or service which is equal to its price multiplied by the quantity demanded
Term
inelelastic demand
Definition
a condition in which the percentage change in quantity demanded is less than the percentage change in price
Term
unitary elastic demand
Definition
not elastic or inelastic because the percentage change in quantity demanded is equal to the percentage change in price
Term
perfectly elastic demand curve
Definition
perfectly horizontal graph, the small percentage change in price brings an infinite percentage change in quantity demanded
Term
perfectly inelastic demand
Definition
the condition in which the quantity demanded does not change as the price changes, vertical line
Term
income elasticity of demand
Definition
the ratio of percentage change in the quantity demanded of a good or service to a given percentage change in income, for a normal good this is positive
Term
cross-elasticity of demand
Definition
the ration of the percentage change in the quantity demanded of a good or service to a given percentage change in the price of another good or service
Term
price elasticity of supply
Definition
the ration of the percentage change in the quantity supplied of a product to the percentage change in its price
Term
tax incidence
Definition
the share of a tax ultimately paid by consumers and sellers
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