Definitions

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Function of the price mechanism
Eliminate a surplus of a good by allowing the market pice to fall
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Ad Valorem Tax
A tax set as a percentage of a good / Pivotal shift in the supply curve
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Asymmetric Information
When one party (i.e. the consumer) has less market information than the other party (i.e the producer)
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Buffer Stock Scheme
Agency intervention to buy or sell a commodity to reduce price fluctuations
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Complement
When a goods demand is increased as a result of the price of another good decreasing. This had a negative cross elasticity of demand
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Consumer Surplus
The difference between the price one is willing to pay and the actual market price. The area below the demand curve and above the equilibrium price line
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Other cards in this set

Card 2

Front

Ad Valorem Tax

Back

A tax set as a percentage of a good / Pivotal shift in the supply curve

Card 3

Front

Asymmetric Information

Back

Preview of the front of card 3

Card 4

Front

Buffer Stock Scheme

Back

Preview of the front of card 4

Card 5

Front

Complement

Back

Preview of the front of card 5
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