Chapter 9 - Behind the Demand Curve

excise tax

A(n) ________ creates a gap between the price customers pay and the price producers receive.

substitution effect

The ________ is defined as a change in the quantity demanded as a good that has become relatively cheaper is substituted for a good that has become relatively more expensive.

midpoint method

The ________ replaces the usual definition of the percent change in a variable, X, with a slightly different definition as associated with the following formula:

Elasticity

________ is a term used by economists to describe how responsive one variable is to changes in another.

% change

________ in x= change in x /average value of x times 100.

Demand

________ for income- elastic items rises faster than income when income rises.