Ch 6 Flashcards
Monetary value of a product
Price
Advantages of Price
Neutrality
Flexibility
Familiarity
Efficiency
The system of allocating gods and services without prices.
Rationing
Problems with Rationing
Perceived Fairness
Administrative Expense
Distorted Incentive
Abuse and Misuse
Fuel created from living materials
Biofuel
In a market economy, buyers and sellers have exactly the ______ goals
Opposite
Buyers want to find good deals at ______ prices.
Low
Simplified version of a complex behavior expressed in the form of an equation, graph, or illustration
Economic Model
Price where quantity supplied equals quantity demanded.
Equilibrium Price
Quantity of output supplied that is equal to the quantity demanded at the equilibrium price
Equilibrium Quantity
A situation where quantity supplied is greater than quantity demanded at a given price.
Surplus
A situation where quantity supplied is less than quantity demanded at a given price.
Shortage
What is the great advantage of competitive markets?
They allocate resources efficiently
The highest legal price that can be charged for a product.
Price Ceiling
The lowest legal price that can be paid for a product.
Floor Price
Price floor for agricultural products set by the government to stabilize farm prices
Target Price
Loan that carries neither penalty nor further obligation to pay
Nonrecourse Loan
