economics - the study of how society manages its scarce resources economy - a group of people working together to allocate scarce resources in order to try to maintain their material wants efficiency - when society gets the most from its scarce resources equality - when prosperity is distributed uniformly among society's members opportunity cost - the value of the next best alternative use of the required resource welfare economics - the study of how the allocation of resources affects economic wellbeing allocation of resources - how much is produced, which producer produces it, and which consumer consumes it marginal buyer - the buyer who would leave a market if the price were any higher consumer surplus - amount a buyer is willing to pay minus the amount the buyer actually pays incidence of a tax - how burden of a tax is shared among market participants income elasticity of demand - measures how much the quantity demanded of a good responds to a change in consumer's income cross-price elasticity of demand - measures how quantity demanded of one good responds to a change in the price of another good price elasticity of supply - measures how much the quantity supplied responds to a change in the price price controls - usually enacted when policy makers believe that market price of a good/service is unfair to buyers or sellers price ceiling - legal maximum on price at which a good can be sold price floor - legal minimum on price at which a good can be sold elasticity - a measure of how much buyers and sellers respond to changes in market conditions; allows us to analyze supply and demand with greater precision