Pairs of Goods for which a rise in the price of one good leads to a decrease in the demand for the other good.
What are complements?
100
Model of how a competitive market works.
What is a supply and demand model?
100
Measures responsiveness of one variable to changes in others.
What is elasticity?
100
when the price of the good increases, an individual will normally consume less of the good
What is substitution effect?
100
an action that is a players best action regardless of the action of the other player
What is dominant strategy?
200
Losses associated with Quantities of output that are greater than or less than the efficient level, as can result from market intervention such as taxes, or from externalities such as pollution.
What is Deadweight Loss?
200
shows the relationship between quantity supplied and price.
What is the supply curve?
200
When the price elasticity of demand is greater than 1
What is elastic?
200
goods for which demand decreases when income falls
What are normal goods
200
study of behavior in situations of interdependence.
What is game theory?
300
Study of Scarcity and Choice.
What is economics?
300
~demand curve
~supply curve
~factors that cause demand or supply curve to shift
~market equilibrium
~ways market equilibrium changes
What are five key elements in the supply and demand model?
300
when price elasticity of demand is less than 1
What is inelastic?
300
change in quantity of a good demanded that results from a change in the overall purchasing power of the consumers income due to a change in the price of that good.
What is the income effect?
300
diagram that shows how the gains to each of the participants in a two- player game depend on the actions of both
What is a payoff matrix?
400
An economic situation in which no individual would be better off doing something different
What is Equilibrium?
400
How much of a good or service consumers will be willing and able to buy at different prices.
What is the demand schedule?
400
when they are nonpartisan
What is unit- elastic?
400
when the price of bacon and bananas goes down, Elvis Presley would buy more peanut butter.
What are complement goods?
400
results when all players choose the action that maximizes their payoffs
What is nash equilibrium?
500
External Costs and External Benefits
What are externalities?
500
changes in:
~the price of related goods or services
~income
~tastes
~expectations
~Numbers of Consumers
What are five principal factors that shift the demand curve for a good or service?
500
two goods measures the effect of the change in one goods price on the quantity demanded of the other good.
What is cross- price elasticity of demand?
500
when you start earning more income, you buy less of this good.