Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

AP Microeconomics > Section 9 > Flashcards

Section 9 Flashcards

1
Q

Substitution Effect

A

the change in the price of a good is the change in the quantity of that good demanded as the consumer substitutes the good that has become relatively more expensive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Income Effect

A

The change in price of a good is the change in the quantity of the good demanded that results from a change in the consumer’s purchasing power when the price of the good changes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Giffen Goods

A

Good that has a demand slope upward not downward

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Inferior good

A

a good for which demand increases when income falls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Price Elasticity of Demand

A

the ratio of the percent change in quantity to the percent change in the price dropping the minus sign

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Midpoint method

A

%change in QD over %change in Price

***When doing the % change its New-Old over Average of both

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Demand is Perfectly Inelastic

A

the Quantity demanded does not respond at all to the changes in the price
Vertical line, Slope is undefined

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Demand is Perfectly Elastic

A

Any price increase will cause the quantity demanded to drop to zero. Horizontal line Slope is 0

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Elasticity of demand- Relatively Elastic

A

if the Price elasticity of demand is greater than one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Elasticity of demand- Relatively Inelastic

A

If the Price Elasticity is less than one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Elasticity of demand- Unit-elastic

A

If the Price Elasticity id exactly one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Total Revenue

A

Total Value of the sales of a good or service. It is equal to the price multiplied by the quantity sold.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What factor determine the price

A

Close substitutes
Necessity or a Luxury
Share of Income
Time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Cross-price elasticity of demand

A

the effect of change in one good’s price on the quantity of the other good. It is equal to the percent change in QD of one good decided by the percent change in the other good’s price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Income Elasticity of Demand

A

is the percent change in the quantity of a good demanded when a consumer’s income changes divided by the percent change in the consumer’s income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Income- Elastic

A

If the income elasticity of demand for that good is greater than one.

17
Q

Income - Inelastic

A

If the income elasticity for a good is greater than 0 but less than one

18
Q

The price elasticity of supply

A

the measure of the responsiveness of the quantity of a good supplied to the price of that good. It is the ratio of the percent change in the quantity supplied to the percent change in price as we move along the supply curve

19
Q

Perfectly inelastic supply

A

when the price elasticity of supply is zero so that changes in the price of a good have no effect on the quantity supplied
Vertical line

20
Q

Perfectly Elastic Supply

A

If the quantity supplied is zero below some price and infinite above that price
Horizontal line

21
Q

Factors that determine the Price elasticity of Supply

A

Availability of inputs

Time

22
Q

Individual consumer surplus

A

net gain to an individual buyer from the purchase of a good it is equal the difference between the buyers willingness to pay and the price paid

23
Q

Individual Producer surplus

A

is the net gain to an individual seller from selling a good. it is equal to the difference between the price received and the seller’s cost.

24
Q

Total Surplus

A

Is the total net gain to consumers and producers from trading in a market it is the sum of producer and consumer surplus

25
Q

Progressive tax

A

rises more than in proportion to income

26
Q

Regressive tax

A

rises less than in proportion to income

27
Q

Proportional tax

A

rises in proportion to the income

28
Q

excise tax

A

tax on sales if a particular good or service

29
Q

Tax incidence

A

distribution of the tax burden

30
Q

Administrative cost

A

the resources used by the government to collect the tax used by government to collect the tax and by taxpayers to pay it over and above the amount collected.

31
Q

Lump-some Tax

A

tax of a fixed amount paid by all taxpayers.

32
Q

Utility

A

the measure of satisfaction

33
Q

Marginal Utility

A

the change in total utility generated by consuming one additional unit of that good or service

34
Q

Optimal Consumption Bundle

A

maximises total utility

35
Q

Optimal Consumption Rule

A

in order to maximize utility a consumer must equate the marginal utility per dollar spent on each good and service in the consumption bundle
MUx/Px= MUy/Py

AP Microeconomics (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions