Markets and Elasticities

Producing the combination of goods and services mostly wanted by society

Consequences of a price floor may include

two or more goods that satisfy a similar need - one can replace the other

when a country has a lower relative cost/opportunity cost, in production of a good than another

tax calculated as a fixed percentage of the price of the good or service

The value of the next best alternative that must be given up or sacrificed for something else

ability of a country to produce a good using fewer resources than another country

a good where demand varies inversely with income

the extra or additional cost of producing one more unit of output

A continuing decrease in the general price level

0 < PED < 1

Any good that is not scarce, ad therefore has a zero opportunity cost - QS>QD

economic contraction with falling real GDP and increasing unemployment or resources for >_6mths

PED =1 is known as

When a government sets a legal maximum price for a particular good

The market mechanism uses ________ which involves prices freely determined by supply and demand

the benefit or satisfaction that consumers derive from consuming a good or service

all resources (land, labour, capital, entrepreneurship) used to produce goods and services

Goods that are held to be desirable for consumers, but are underprovided by the market

A measure of the responsiveness or sensitivity of a variable to changes in price or variables