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AGGREGATE DEMAND CURVE: A graphical representation of the relation between aggregate expenditures on real production and the price level, holding all ceteris paribus aggregate demand determinants constant. The aggregate demand, or AD, curve is one side of the graphical presentation of the aggregate market. The other side is occupied by the aggregate supply curve (which is actually two curves, the long-run aggregate supply curve and the short-run aggregate supply curve). The negative slope of the aggregate demand curve captures the inverse relation between aggregate expenditures on real production and the price level. This negative slope is attributable to the interest-rate effect, real-balance effect, and net-export effect.
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Lesson 12: Elasticity and Demand | Unit 3: Measurement
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Page: 17 of 25
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In this unit, you should have learned about:- Calculating the price elasticity of demand using the midpoint formula.
- How the price elasticity of demand takes on a range of values over a demand schedule.
- Why a straight-line demand curve contains all five elasticity alternatives -- perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic.
- The difference between slope measured in actual units and elasticity measured in relative values.
- Why elasticity changes along demand curve from high prices and small quantities to low prices and large quantities..
- The relation between total expenditures on a good and the five elasticity alternatives on a demand curve.
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OPPORTUNITY COST The highest valued alternative foregone in the pursuit of an activity. Opportunity cost is a one of the most fundamental concepts used in the study of economics. An opportunity cost can be either explicit, usually involving a monetary payment, or implicit, which does not involve a transaction. Opportunity cost is also commonly termed economic cost.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet seeking to buy either a how-to book on fixing your computer, with illustrations or several magazines on computer software. Be on the lookout for defective microphones.
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This isn't me! What am I?
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In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
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"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
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OPBU
Operating Budget
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