S&D
The Law of Demand: As price falls, quantity demanded does this
What is increase?
If quantity demanded changes little in response to a large price change (e.g. a life saving medicine), demand is relatively this
What is inelastic?
An inefficiency resulting from a market intervention
What is dead weight loss?
A tax on foreign trade
What is a tariff?
Total Revenue =
Quantity demanded equals quantity supplied is known as this
What is market equilibrium
A small price change causing a large change in quantity demanded then demand is relatively this
What is elastic?
Minimum wage is an example
What is a price floor?
When a tariff is enforced, producer surplus will
What is increase?
What is PED = (% change Qd) / (% change P)
Which direction would the supply curve shift if a new technology cuts production time in half?
What is to the right?
Cross Price Elasticity: XED > 0
What are substitutes?
A binding price ceiling will create this
What is a shortage?
When a tariff is enforced, consumer surplus will
What is decrease?
Formula for Percentage Change
What is ((New # - Old #) / Old #) x 100
This happens when Qd > Qs
What is a shortage?
If income increases, but quantity demanded for a product declines (YED < 0), the good is said to be this
What is an inferior good?
A binding price floor will create this
What is a surplus?
These people bear more of the cost of a tax if demand is inelastic
Who are consumers?
Cross Price Elasticity (XED) =
What is XED = (% change Qd good A) / (% change P good B)
Double shifter: A global recession while OPEC cuts oil production simultaneously will tend to make the global oil price in the future this
What is indeterminant?
If a 15% change in quantity demanded results from a 15% change in price, then demand is said to be
What is unit elastic?
A quota restricts a market based on this
What is quantity?
Tariff revenue is equal to
What is tariff x quantity imported?
Income Elasticity (YED) =
YED = (% change Qd) / (% change income)