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Solutions for Chapter 5: Elasticity and Its Application

Principles of Macroeconomics | 6th Edition | ISBN: 9780538453066 | Authors: N. Gregory Mankiw

Full solutions for Principles of Macroeconomics | 6th Edition

ISBN: 9780538453066

Principles of Macroeconomics | 6th Edition | ISBN: 9780538453066 | Authors: N. Gregory Mankiw

Solutions for Chapter 5: Elasticity and Its Application

Since 15 problems in chapter 5: Elasticity and Its Application have been answered, more than 4322 students have viewed full step-by-step solutions from this chapter. Principles of Macroeconomics was written by and is associated to the ISBN: 9780538453066. This expansive textbook survival guide covers the following chapters and their solutions. Chapter 5: Elasticity and Its Application includes 15 full step-by-step solutions. This textbook survival guide was created for the textbook: Principles of Macroeconomics, edition: 6.

Key Business Terms and definitions covered in this textbook
  • average variable cost

    variable cost divided by the quantity of output

  • budget surplus

    an excess of tax revenue over government spending

  • consumer price index (CPI)

    a measure of the overall cost of the goods and services bought by a typical consumer

  • corrective tax

    a tax designed to induce private decision makers to take account of the social costs that arise from a negative externality

  • Fisher effect

    the one-for-one adjustment of the nominal interest rate to the inflation rate

  • fractional-reserve banking

    a banking system in which banks hold only a fraction of deposits as reserves

  • internalizing the externality

    altering incentives so that people take account of the external effects of their actions

  • law of demand

    the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises

  • leverage ratio

    the ratio of assets to bank capital

  • market power

    the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

  • nominal exchange rate

    the rate at which a person can trade the currency of one country for the currency of another

  • open economy

    an economy that interacts freely with other economies around the world

  • perfect substitutes

    two goods with straight-line indifference curves

  • price ceiling

    a legal maximum on the price at which a good can be sold

  • principal

    a person for whom another person, called the agent, is performing some act

  • private saving

    the income that households have left after paying for taxes and 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

  • reserve ratio

    the fraction of deposits that banks hold as reserves

  • risk aversion

    a dislike of uncertainty

  • strike

    the organized withdrawal of labor from a firm by a union

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