Monday, March 17, 2014

The List of the Most Important Definitions for Chapter 2 (CIE AS): The Price System

Here you go,


1. Ad-valorem tax: An indirect tax that is levied based on certain percentage rate of the selling price

2. Cross elasticity of demand: An economic concept that measures the responsiveness of demand for a good to a change in the price of another good
  
3. Competitive demand: A situation where one good can be used in place of another

4. Complementary goods: Goods which have to be consumed together

5. Change in demand: It is when there is a change or shift in the market demand curve

6. Change in quantity demanded: It is when the demand for a product changes as a result of a change in its own price

7. Change in supply: It is when there is a change or shift in the market supply curve

8. Change in quantity supplied: It is when the supply for a product changes as a result of a change in its own price

9. Consumer surplus: The difference between what consumers are willing and able to pay and what they are actually paying at the market price

10. Demand curve: A curve that shows how much of a good or service will be demanded by consumers at a given price in a given period of time

11. Demand schedule: A table that shows the quantities of a product bought at different prices in a given period of time

12. Derived demand: This is where the demand for factors of production is as a result of the demand for that final good or service

13. Direct tax: A tax that is directly paid to the government by working individuals and firms

14. Disequilibrium: A situation where there is an imbalance between demand and supply in a market

15. Equilibrium: A situation where the quantity demanded for a good in the marketplace is exactly equal to the quantity supplied

16. Income elasticity of demand: An economic concept that measures the responsiveness of demand for a good to a change in income

17. Income inelastic in demand: Is when a change in income leads to a smaller than proportionate change in the demand for a particular good

18. Income elastic in demand: Is when a change in income leads to a larger than proportionate change in the demand for a particular good

19. Inferior goods: Goods or services where its demand will fall whenever there is an increase in income

20. Incidence of tax: Refers to the burden of taxation

21. Indirect tax: A tax that is imposed upon expenditure

22. Joint demand: A situation where two goods have to be consumed together

23. Joint supply: A situation where the production of one good leas to the production of another related good

24. Normal goods: Goods or services where their demand will increase whenever there is an increase in income

25. Necessity: Goods or services where its consumption is essential for survival

26. Price elasticity of demand: An economic concept that measures the responsiveness of quantity demanded for a good to a change in its own price

27. Price inelastic in demand: Is when a change in price leads to a smaller than proportionate change in the quantity demanded for a good

28. Price elastic in demand: Is when a change in price leads to a larger than proportionate change in the quantity demanded for a good

29. Perfectly elastic in demand: Is when all goods are bought at a given price

30. Perfectly inelastic in demand: Is when a change in price does not have any effect onto the quantity demanded for a good

31. Price elasticity of supply: Measures the responsiveness of quantity supplied for a good to a change in its own price

32. Price inelastic in supply: Is when a change in price leads to a smaller than proportionate change in the quantity supplied of a good

33. Price elastic in supply: Is when a change in price leads to larger than proportionate change in the quantity supplied of a good

34. Perfectly elastic in supply: Is when all goods are sold at a given price

35. Perfectly inelastic in supply: Is when a change in price does not have any effect onto the quantity supplied of a good

36. Price mechanism: The interaction of demand and supply to allocate scarce resources and resolve the problem of infinite wants


37. Producer surplus: The difference between the market price and the lowest price that producers are willing and able to sell at

38. Supply curve: A curve that shows how much of a good and service that will be supplied by producers at a given price in a given period of time

39. Supply schedule: A table that shows the quantities of a product that is sold at different prices in a given period of time

40. Substitute goods: Goods that can be used in the place of another

41. Specific tax: An indirect tax with a fixed amount for every unit of output

42. Subsidies: A grant given by the government to reduce the production costs of a good or service

43. Total revenue: Total income that firms receive from sales

44. Unitary price elasticity of demand: Is when a change in price leads to a proportionate change in the quantity demanded for a good

45. Unitary price elasticity of supply: Is when a change in price leads to a proportionate change in the quantity supplied of a good

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