Principles of Economics - Practice Midterm Flashcards

These flashcards cover key vocabulary and concepts based on the practice midterm exam for Principles of Economics.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Equilibrium Quantity

The quantity of a good or service that is supplied and demanded at the equilibrium price.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium outcome is not achievable or not achieved.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare.

Inferior Goods

Goods for which demand increases as consumer incomes fall and decreases as incomes rise.

Consumer Surplus

The difference between what consumers are willing to pay for a good versus what they actually pay.

Producer Surplus

The difference between what producers are willing to sell a good for versus what they actually receive.