Absolute (Money) Price

Positive Economics The study of “what
is” in economics.
Positive Externality The condition that
exists when a person’s or group’s actions
create a benefit (beneficial side effect) for
others.
Positive Rate of Time Preference A
preference for the earlier over the later availability of goods.
Poverty Income Threshold (Poverty
Line) The income level below which people
are considered to be living in poverty.
Present Value The current worth of some
future dollar amount of income or receipts.
Price Ceiling A government-mandated
maximum price above which legal trades
cannot be made.
Price Discrimination A price structure in
which the seller charges different prices for
the product it sells and the price differences
do not reflect cost differences.
Price Elasticity of Demand A measure of
the responsiveness of quantity demanded to
changes in price.
Price Elasticity of Supply A measure of
the responsiveness of quantity supplied to
changes in price.
Price Floor A government-mandated
minimum price below which legal trades
cannot be made.
Price Index A measure of the price level.
Price Level A weighted average of the
prices of all good and services.
Price-Level Effect The change in the
interest rate due to a change in the price level.
Price Searcher A seller that has the ability
to control to some degree the price of the
product it sells.
Price Taker A seller that does not have the
ability to control the price of the product it
sells; the seller “takes” the price determined
in the market.