Ch.5 Flashcards
(23 cards)
Economics 12
Chapter 5 Vocabulary
black market
The illegal exchange of goods in short supply, as when some people buy up as much of a good as possible, stockpile it, and sell it at a higher price.
ceiling price
A restriction imposed by a government in order to prevent the price of a product from rising above a certain level.
consumer equilibrium
The state of satisfaction a consumer reaches when the marginal utility divided by price is equal for two or more products bought by that consumer.
consumer surplus
The difference between what consumers are willing to pay for an item and what they actually pay.
elastic coefficient
A coefficient for a product of more than one, indicating that a given percentage change in price causes a greater percentage change in quantity demanded.
elasticity
The responsiveness of quantities demanded and supplied to a change in price.
elasticity of supply
The responsiveness of the quantity supplied by a seller to a rise or fall in its price.
floor price
A restriction that prevents a price from falling below a certain level.
inelastic coefficient
A coefficient for a product of less than one, indicating that a given percentage change in price causes a smaller percentage change in quantity demanded.
marginal utility
A measure of the extra satisfaction that a consumer achieves from consuming one more unit of a product.
marketing board
An agricultural organization established to administer quotas and market the products of its producers.
minimum wage
A government-established wage, higher than one set by the demand for, and supply of, workers.
paradox of value
A seeming contradiction in the economy in which the demand for necessities needed for survival is not high enough to ensure that their prices at least match the prices of luxury items, which are unnecessary for survival.
price elasticity of demand
An expression of how much more or less consumers will buy of a product if its price changes.
quota
A restriction placed on the amount of product that domestic producers are allowed to produce; also, a limit on the total quantity of goods imported into a country.
rent
The price people pay for accommodation, determined by demand and supply for rental accommodation.
subsidy
A payment made by a government to a producer to achieve some desired outcome, such as installing pollution control equipment.
total revenue
The price of a product multiplied by the quantity demanded of the product.
unitary coefficient
A coefficient for a product equal to one, indicating that a given change in price causes an equal percentage change in quantity demanded.
util
A theoretical unit of satisfaction that a person gains from consuming an item.
utility theory (marginal utility theory of consumer choice)
A theory stating that the extra satisfaction that a consumer achieves from consuming successive units of a good diminishes. With two or more items, consumers maximize their satisfaction when they receive the same amount of satisfaction per final dollar spent for each item, a condition called consumer equilibrium.
wage
The price a worker receives for supplying labour to a business with a demand for it.
