double taxation:Income that is taxed twice because corporations pay taxes on income before dividends are paid and
shareholders pay taxes on dividends received as a result of holding stock.dumping:Selling goods internationally at lower prices relative to domestic prices.durable goods:A good that is consumed at a slower rate that is capable of lasting for an extended period of time.E
earnings:Total compensation paid for employment (wages, salaries, bonus, and commission).economic costs:Total costs, including opportunity costs and implicit and explicit costs, of a resource for a producer.economic efficiency:A situation in which resources are allocated and used to their maximum capabilities.economic profit:Explicit and implicit costs subtracted from total revenue (pure profit).economic regulation:Government regulations related to the workings of the economy.economic rent:Earnings a resource owner obtains after opportunity costs have been calculated.economic system:A way of allocating goods and services to society.economics:A social science that necessitates choice because of the existence of scarcity.economies of scale:The decrease of per-unit costs as production increases and all resources are adjustable.efficiency:Using available resources to produce the maximum amount of goods.elastic demand:A formula that determines the sensitivity of quantity demanded to a price change. It occurs when the
percentage change in quantity demanded is greater than the percentage change in price.elastic supply:A formula that indicates when suppliers are sensitive to a price change. It occurs when the percentage
change in quantity supplied is greater than the percentage change in price.elasticity:A measure of how responsive quantity supplied or quantity demanded is to a change in price.entrepreneur:A risk taker who starts a business or monetary enterprise.equation:A mathematical formula that relates two or more variables.equation of exchange:A formula that relates the quantity of money to nominal GDP.equilibrium:The point of balance at which quantity demanded and quantity supplied intersect at a specific price.equilibrium price:The price that balances quantity supplied and quantity demanded.equilibrium quantity:The quantity at which quantity supplied and quantity demanded intersect.equity:Shares of stock or value earned.excess capacity:The production level that is located below the average total cost. A firm can increase production in
this range while decreasing production costs.excess demand:The difference when quantity demanded exceeds quantity supplied at a specific price.excess supply:The amount where quantity supply exceeds quantity demanded.exchange rate:The value of one unit of currency in terms of another country’s currency.CliffsAP Economics Micro & Macro23 53999X Gloss.qxd 1/23/04 10:31 AM Page 248