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PER UNIT TAX: A tax that is specified as a fixed amount for each unit of a good sold. Federal excise taxes on gasoline and cigarettes fall into this per unit tax category.
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Lesson 12: Elasticity and Demand | Unit 5: Other Measures
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Page: 24 of 25
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Topic:
Cross Elasticity Of Demand
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- How responsive is my demand to this change in my other prices? To answer these questions, we need the cross elasticity of demand.
- Cross elasticity of demand is the relative response of the demand for one good to changes in the price of another good.
- Or stated in percentage terms: the cross elasticity of demand is the percentage change in demand for one good resulting from a percentage change in the price of another good.
- The cross elasticity of demand is a handy numerical measure commonly used by economists to identify complement and substitute goods:
- For a substitute good, cross elasticity is positive, meaning that an increase in the price of one good leads to an increase in demand for the other good.
- For an complement good, cross elasticity is negative, meaning that an increase in the price of one good leads to a decrease in demand for the other good.
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ECONOMIC EFFICIENCY Obtaining the most consumer satisfaction from available resources. In other words, resources are allocated in such a way that consumer satisfaction is at its highest possible level. This is also termed either efficiency or allocative efficiency.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius seeking to buy either a printer that works with your stockpile of ink cartridges or income tax software. Be on the lookout for slow moving vehicles with darkened windows.
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This isn't me! What am I?
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A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
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"I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing. " -- Ronald Reagan, 40th US president
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NNP
Net National Product
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