A situation that occurs in a market when the prce is such that the quantity that consumers wish to buy is exactly balanced by the quantity that firms wish to supply
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Unemployment
Results when people seeking work at the going wage cannot find a job
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Comparative static analysis
Examines the effect on equilibrium of a change in the external conditions affecting a market
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Elasticity
A measure of the sensitivity of one variable to changes in another variable
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Price elasticity of demand
A measure of the sensitivity of quantity demanded to a change in the price of a good or service. Measure = % change in quantity demanded / % change in price
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Income elasticity of demand (YED)
A measure of the sensitivity of quantity demanded to a change in consumer incomes. Measured as = % change in quantity demanded / % change in consumer income
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Superior good
One for which the income elasticity of demand is positive, and greater than 1, such that as income rises, consumers spend propotionally more on the good
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Cross elasticity of demand (XED)
A measureof the sensitivity of quantity demanded of a good demanded of a good or service to a change in the price of some other good or service
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Price elasticity of supply (PES)
A measure of the sensitivity of quanitiy supplied of a good or service to a change in the price of that good or service. Measured as = % change in the quantity supplied / % change in price
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Other cards in this set
Card 2
Front
Unemployment
Back
Results when people seeking work at the going wage cannot find a job
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