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cross price elasticity of demand (C1, DO)<br />The responsiveness of the quantity demanded of one good to a change in the price of another good. It can be measured, for example, as the ratio of the percentage change in quantity demanded of good A to the percentage change in the price of good B. If A and B are substitutes the cross price elasticity is positive; it is negative if A and B are complements. The concept has been used extensively by analysts of market concentration and ANTITRUST lawyers as it indicates whether the dissimilar output from different firms is supplied to one or several markets_<br /><em>See also:</em> elasticity
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exit-voice (DO)<br />A distinction used to classify the physical or verbal methods individuals use to reveal their preferences. 'Voice' can take the form of voting (as in democratic politics) or complaints (as under grievance procedures); 'exit' is movement away from a less desired situation, e.g. a particular employment, region or country. 'Exitvoice' can be applied to collective or individual choice.<br /><em>See also:</em> Tiebout hypothesis <br /><em>Reference</em><br />Hirschman, A.O. (1970) Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States, Cambridge MA: Harvard University Press.
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average propensity to consume (E2)<br /> The ratio of a consumer's total consumption to his or her total income. For lowincome groups the average propensity to consume is unity, or close to unity, as there is no surplus over expenditure available for saving. As income rises and basic consumer goods have been purchased, this propensity declines; also it varies over the life cycle (see LIFE-CYCLE HYPOTHESIS). If a graph of the CONSUMPTION FUNCTION passes through the origin, the average propensity to consume (C/Y) equals the MARGINAL PROPENSITYTOCONSUME ( C/ Y) at all levels of income and is unity; a consumption function with a constant slope has the same MARGINAL PROPENSITY TO CONSUME at all income levels.
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