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Econ Chapter 5

  1. The buyer's problem has 3 parts
    • - what you like
    • - prices ( how much does it cost)
    • - your budget (how much money do you have)
  2. The difference between what a buyer is willing to pay for a good and what the buyer actually pays
    Consumer surplus
  3. Measure a variables responsiveness to change in another variable
    Elasticity
  4. An individual demand curve reflects
    an ability and willingness to par for a good or service
  5. An ___ buyer makes decisions at the margin
    optimizing
  6. Three measure of elasticity
    • 1. price elasticity of demand
    • 2. Cross - price elasticity of demand 
    • 3. income elasticity of demand
  7. price elasticity of demand answers the question of :
    how much does quantity demanded change when the goods prices changes
  8. cross- price elasticity of demand answers the
    how much does quantity demanded change one good when the  prices of another good changes
  9. how much does quantity demanded change when income changes
    income elasticity if demand
Author
dwrght16
ID
329498
Card Set
Econ Chapter 5
Description
Midterm
Updated

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