AMPP Chapter 2_Vocab

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Author:
uhxm
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284658
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AMPP Chapter 2_Vocab
Updated:
2014-10-01 20:46:14
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AMPP
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economics
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for KDI school
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  1. Supply and Demand Analysis
    A fundamnetal and powerful tool that can be applied to a wide variety of interesting and important problem
  2. Supply Curve
    Relationship between the qauntity of a good that producers are willing to sell and the price of the good

    Qs=Qs(P)
  3. Demand Curve
    Relationship between the quantity of a good tht consumers are willing to buy and the price of the good.

    Qd=Qd(P)
  4. Substitues
    Two goods for whcih an increase in the pirce of one leads to an increase in the quantity demanded of the other
  5. Complements
    Two goods for which an increase in the price of one leades to a decrease in the quantity demanded of the other
  6. Equilibrium Price (Market Clearing)
    Price that equates the quantity supplied to the qauntitiy demanded. 

    - 가격의 수요와 공급에 의해 상승 또는 하락의 압력을 받지 않아, 더 이상 움직이지 않는 상태. 시장의 균형 사태에 있다.
  7. Market Mecahnism
    Tendency in a free market for price to change until the market clears
  8. Surplus
    Situation in which the quantity supplied exceeds the quantity demanded
  9. Shortage
    Situation in which quantity demanded exceeds the qauntity supplied
  10. Elasticity
    Meausres the sensitivity of one variable to another. 

    Percentage change in one variable resulting from a 1% increase in another.
  11. Price Elasticity of demand
    Percentage change in quantity demand of a good resulting from a 1% increase in its pirce

    Ep=(%△Q)/(%△P)

    Ep=P△Q / Q△P

    *usually negative number
  12. Linear demand curve
    Demand curve that is a straight line

    Q=a-bP
  13. Infinitely elastic Demand
    Principle that consumers will buy as much of a good as they can get at a single price, but for any higher price the qunatity for any lower price the quantity demanded increases without limit

    -Consumers will buy as much as they can at a single price P*
  14. Completely inelastic Demand
    Principle that consumers will buy a fixed quantity of a good regardless of its price
  15. Income elasticity of demand
    Percentage change in the quantity demanded, Q, resulting from a 1% increase in income

    Ei=(I/Q)(△Q/△I)
  16. Cross price elasticity of demand
    Percentage change in the quantity demanded of one good resulting from a 1% increase in the price of another

    EQaPb = (Pb/Qa)(△Qa/△Pb)

    product a and Product b
  17. Price elasticity of supply
    Percentage change in quantity supplied resulting from a 1% increase in price
  18. Point elasticity of demand
    Price elasticity at a particular point on the demand curve
  19. Arc elasticity of demand
    Price elasticity calculated over a range of prices

    Arc elasticity: Ep=(△Q/△P)(aver.P/aver.Q)

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