Ch 6 Flashcards
1
Q
Name the three ways the government will intervene in the market.
A
- Changing distribution of surplus
- Encouraging or discouraging the consumption of certain goods
- Correcting market failures
2
Q
A(n) ___ is a regulation that sets a maximum or a minimum legal price for a good.
A
price control
3
Q
Name the 3 effects of taxes on sellers.
A
- Supply decreases
- Demand stays the same
- Equilibrium price increases and quantity demanded decreases
4
Q
Name the 3 effects of taxes on buyers.
A
- Supply stays the same
- Demand decreases
- Equilibrium price and quantity both decrease
5
Q
Name the 3 effects of subsidies to sellers
A
- Supply increases
- Demand stays the same
- Equilibrium price decreases and quantity increases
