The ratio of the percentage change in quantity demanded to the percentage change in price is called _____________________
Price elasticity of demand
__________________ is a more than 1 percent change in quantity demanded in response to a 1 percent change in price.
________________ is a less than 1 percent change in quantity demanded in response to a 1 percent change in price.
__________________ is a 1 percent change in quantity demanded in response to a 1 percent change in price.
Unitary elastic demand
An extreme case in which the demand curve is horizontal and the elasticity coefficient equals infinity is called ________________.
Perfectly inelastic demand
An extreme case in which the demand curve is vertical and the elasticity coefficient equals zero is called _________________
Perfectly inelastic demand
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 is called _________________.
_______________________ is the ratio of the percentage change in the quantity demanded of a good or service to a given percentage change in income.
Income elasticity of demand
__________________________ is the ratio of the percentage change in the quantity supplied of a product to the percentage change in its price.
Price elasticity of supply
The share of a tax ultimately paid by consumers and sellers is called ________________.
The ratio 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 is called a (an) _________________________
Cross-elasticity of demand
________________ is the satisfaction, or pleasure, that people receive from consuming a good or service.
The principle that the extra satisfaction of a good or service declines as people consume more in a given period is called the _____________________
Law of diminishing marginal utility
A condition in which total utility cannot increase by spending more of a given budget on one good and spending less on another good is called _________________
__________________ is the change in total utility from one additional unit of a good or service
The change in quantity demanded of a good or service caused by a change in real income (purchasing power) is called the _____________________.
______________ is the amount of satisfaction received from all the units of a good or service consumed.
___________________ is the change in quantity demanded of a good or service caused by the change in its price relative to substitutes.
A (an) ____________ is a maximum price mandated by government.
A (an) _______________ is a minimum legal price mandated by government.
Pollution is an example of __________________ which means too many resources are used to produce the product responsible for pollution. Two basic approaches to solve this market failure are regulation and pollution taxes.
Vaccination shots provide _________________, which means sellers devote too few resources to produce this product. Two basic solutions to this type of market failure are laws to require consumption of shots and special subsidies.
A (an) _________________ is consumed by everyone regardless of whether they pay for them or not. National defense and air traffic control are examples.
_______________ means the price system fails to efficiently allocate resources in the production of output.
A (an) _____________ is a cost or benefit imposed on people other than the consumers and producers of a good or service.
__________________ is equal to total revenue minus both explicit and implicit costs.
The opportunity cost of resources owned by the firm are called ______________.
The ________________ is a time period during which a firm cannot alter some input such as its factory size.
A (an) _______________ is the relationship between output and inputs.
After some level of output in the short run, each unit of the variable input yields smaller and smaller marginal product. This principle is called the _____________________.
law of diminishing return
_____________________ includes costs, such as rent for office space, that cannot vary with the level of output
________________, such as wages, vary as the level of output varies.
Total variable cost (TVC)
___________________ is the change in total cost, associated with a change in one unit of output.
Marginal cost (MC)
______________________ is the sum of average fixed cost and average variable cost.
Average total cost (ATC)
When long-run average cost decreases as output increases, the firm experiences _______________________.
economies of scale
Payments to non owners of a firm for their resources are called ________________.
_______________ is the minimum profit necessary to keep a firm in operation.
Any resource for which the quantity cannot change during the period of time under consideration is called ________________.
fixed input (FI)
A period of time so long that all inputs are variable is called a (an) ________________.
_________________ is the change in total output produced by adding one unit of a variable input, with all other inputs used being held constant.