Robert H. Frank,
Cornell University
Ian C. Parker,
University of Toronto
| Cross-price elasticity of demand | The percentage change in the quantity of one good demanded that results from a 1 percent change in the price of another good.
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| Engel curve | A curve that plots the relationship between the quantity of a good consumed and income.
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| Income-consumption curve (ICC) | Holding the prices of X and Y constant, the ICC for a good X is the set of optimal bundles traced on an indifference map as income varies.
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| Income effect | That component of the total effect of a price change that results from the associated change in real purchasing power.
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| Income elasticity of demand | The percentage change in the quantity of a good demanded that results from a 1 percent change in income.
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| Price-consumption curve (PCC) | Holding income and the price of Y constant, the PCC for a good X is the set of optimal bundles traced on an indifference map as the price of X varies.
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| Price elasticity of demand | The percentage change in the quantity of a good demanded that results from a 1 percent change in its price.
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| Substitution effect | That component of the total effect of a price change that results from the associated change in the relative attractiveness of other goods.
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2002 McGraw-Hill Higher Education