- Module 46.1: In each of the following cases, state whether the income effect, th...
- Module 46.2: The price of strawberries falls from $1.50 to $1.00 per carton, and...
- Module 46.3: At the present level of consumption, 4,000 movie tickets, and at th...
- Module 46.4: The price elasticity of demand for ice-cream sandwiches is 1.2 at t...
- Module 46.5: If a 2% change in the price of a good leads to a 10% change in the ...
Solutions for Chapter Module 46: Income Effects, Substitution Effects, and Elasticity
Full solutions for Krugman's Economics for AP* | 2nd Edition
Solutions for Chapter Module 46: Income Effects, Substitution Effects, and ElasticityGet Full Solutions
a person who is performing an act for another person, called the principal
diminishing marginal product
the property whereby the marginal product of an input declines as the quantity of the input increases
the offering of different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics
diseconomies of scale
the property whereby long-run average total cost rises as the quantity of output increases
financial institutions through which savers can directly provide funds to borrowers
the group of institutions in the economy that help to match one person’s saving with another person’s investment
a banking system in which banks hold only a fraction of deposits as reserves
the study of how people behave in strategic situations
gross domestic product (GDP)
the market value of all final goods and services produced within a country in a given period of time
law of supply and demand
the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance
the regular pattern of income variation over a person’s life
a legal maximum on the price at which a good can be sold
a person for whom another person, called the agent, is performing some act
goods that are both excludable and rival in consumption
production possibilities frontier
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology
the amount of a good that buyers are willing and able to purchase
real exchange rate
the rate at which a person can trade the goods and services of one country for the goods and services of another
an excess of imports over exports
the costs that parties incur in the process of agreeing to and following through on a bargain
the political philosophy according to which the government should choose policies to maximize the total utility of everyone in society