(See related pages)
|
|
|
| allocative efficiency | The apportionment of resources among firms and industries to produce the goods most wanted by society. (See page(s) p. 110) |
| |
| |
| |
| consumer surplus | The difference between the maximum price consumers are willing to pay for a product and the actual price. (See page(s) p. 107) |
| |
| |
| |
| crop restriction | In return for guaranteed prices for their crops, farmers agree to limit the number of hectares they plant in that crop. (See page(s) p. 106) |
| |
| |
| |
| cross elasticity of demand | The ratio of the percentage change in quantity demanded of one good to the percentage change in the price of some other good; a positive coefficient indicates the two products are substitute goods; a negative coefficient indicates they are complementary goods. (See page(s) p. 99) |
| |
| |
| |
| deficiency payments | Subsidies that make up the difference between market prices and government-supported prices; a method of price support. (See page(s) p. 106) |
| |
| |
| |
| efficiency losses | Reductions of combined consumer and producer surplus caused by an underallocation or overallocation of resources to the production of a good or service. Also called deadweight loss. (See page(s) p. 110) |
| |
| |
| |
| elastic demand | Product or resource demand whose price elasticity is greater than one. (See page(s) p. 89) |
| |
| |
| |
| income elasticity of demand | The ratio of the percentage change in the quantity demanded of a good to a percentage change in consumer income; measures the responsiveness of consumer purchases to income changes. (See page(s) p. 100) |
| |
| |
| |
| inelastic demand | Product or resource demand for which the price elasticity coefficient is less than one. (See page(s) p. 89) |
| |
| |
| |
| long run | A period of time long enough to enable producers of a product to change the quantities of all the resources they employ. (See page(s) p. 98) |
| |
| |
| |
| market period | A period in which producers of a product are unable to change the quantity produced in response to a change in its price; in which there is a perfectly inelastic supply. (See page(s) p. 97) |
| |
| |
| |
| midpoint formula | A method for calculating price elasticity of demand or price elasticity of supply that averages the two prices and two quantities as the reference points for computing percentages. (See page(s) p. 88) |
| |
| |
| |
| perfectly elastic demand | Product or resource demand in which quantity demanded can be of any amount at a particular product price; graphs as a horizontal demand curve. (See page(s) p. 89) |
| |
| |
| |
| perfectly inelastic demand | Product or resource demand in which price can be of any amount at a particular quantity of the product or resource demanded; quantity demanded does not respond to a change in price; graphs as a vertical demand curve. (See page(s) p. 89) |
| |
| |
| |
| price elasticity of demand | The ratio of the percentage change in quantity demanded of a product or resource to the percentage change in its price; a measure of the responsiveness of buyers to a change in the price of a product or resource. (See page(s) p. 87) |
| |
| |
| |
| price elasticity of supply | The ratio of the percentage change in quantity supplied of a product or resource to the percentage change in its price; the responsiveness of producers to a change in the price of a product or resource. (See page(s) p. 97) |
| |
| |
| |
| price supports | Government-supported minimum prices for agricultural products. (See page(s) p. 104) |
| |
| |
| |
| producer surplus | The difference between the actual price producers receive and the minimum acceptable price. (See page(s) p. 108) |
| |
| |
| |
| productive efficiency | The production of a good in the least costly way. (See page(s) p. 109) |
| |
| |
| |
| quota | A restriction on the amount of a product that a farm is allowed to produce in a given period. (See page(s) p. 106) |
| |
| |
| |
| short run | A period of time in which producers are able to change the quantities of some but not all of the resources they employ. (See page(s) p. 98) |
| |
| |
| |
| total revenue | The total number of dollars received by a firm from the sale of a product. (See page(s) p. 90) |
| |
| |
| |
| total-revenue test | A test to determine elasticity of demand between any two prices: Demand is elastic if total revenue moves in the opposite direction as price; it is inelastic when it moves in the same direction as price; and it is of unitary elasticity when it does not change when price changes. (See page(s) p. 90) |
| |
| |
| |
| unit elasticity | Demand or supply for which the elasticity coefficient is equal to one. (See page(s) p. 89) |