UNIT 2 AP MIRCO ECON

5.0(1)
studied byStudied by 5 people
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/35

flashcard set

Earn XP

Description and Tags

Mr witt

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

36 Terms

1
New cards
Law of demand
price goes down, demand goes up
2
New cards
Law of supply
Direct relationships between price and quantity supplied
3
New cards
Substitution effect
decrease in sales for an item becasue there is a cheaper alternative
4
New cards
income effect
More income, buying more
5
New cards
law of diminishing marginal utility
doing something for the 5th time isnt going to be as good as doing it the first time
6
New cards
normal goods
more income, more buying
7
New cards
inferior goods
less income, more buying
8
New cards
consumer surplus
paying UNDER what you WOULD have paid for a good
9
New cards
producer surplus
selling a good for MORE than they could
10
New cards
production subcity
government giving money to producers to make more of sometihng
11
New cards
elastic demand
sensitive to a change in price
12
New cards
inelastic demand
insensitive to a change in price
13
New cards
marginal utility
how much MORE happiness youre getting from doing something again
14
New cards
CS before tax
CS before tax
ABCD
ABCD
15
New cards
PS before tax
PS before tax
EFGH
EFGH
16
New cards
Tax per unit
Tax per unit
$4
$4
17
New cards
CS (customer surplus) after tax
CS (customer surplus) after tax
B
B
18
New cards
dead weight loss
dead weight loss
DE
DE
19
New cards
total tax revenue to government
total tax revenue to government
ACHF
ACHF
20
New cards
total spending by buyers
total spending by buyers
ACHFGI
ACHFGI
21
New cards
net revenue to sellers
net revenue to sellers
GI
GI
22
New cards
Amount of tax buyers pay
Amount of tax buyers pay
AC
AC
23
New cards
Amount of tax sellers pay
Amount of tax sellers pay
HF
HF
24
New cards
income elasticity of demand
shows how sensitive a product is to a change in income
25
New cards
FORMULA for income elasticity of demand
% change in quantity/5 change in income
26
New cards
Utility maximizing rule
consumers should attempt to make their utility per dollar equal to the price of the good
27
New cards
cross price elasticity
shows how sensitive a product is to a change in price of another good
28
New cards
EQUATION cross price elasticity
% change in quantity of product B/ % change in price of product A
29
New cards
Price elasticity of supply
Shows how sensitive producersE are to a change in price
30
New cards
EQUATION price elasticiity of supply
% change in quantity/ % change in price
31
New cards
total revenue equation
price x quantity sold= TR
32
New cards
price effect
price up, each unit sold sells a higher price, which tends to raise revenue
33
New cards
Quantity effect
price up, fewer units are sold, tends to lower revenue
34
New cards
6 shifters of supply
price/availability, number of sellers, technology, government action, opportunity cost of alternative, expectation of future profit
35
New cards
shifters of demand
taste/preference, number of consumers, price of related goods, income, future expectations
36
New cards
whos the best person ever?
SARAH!