chap 6

Question 1

market equilibrium

Answer 1

occurs when the quantity demanded and the quantity supplied at a particular price are equal.

Question 2

equilibrium price

Answer 2

is the price at which the quantity demanded and the quantity supplied are equal.

Question 3

surplus

Answer 3

is the result of quantity supplied being greater than quantity demanded

Question 4

shortage

Answer 4

is the result of quantity demanded being greater than quantity supplied.

Question 5

disequilibrium

Answer 5

occurs when quantity demanded and quantity supplied are not in balance.

Question 6

competitive pricing

Answer 6

occurs when producers sell products at lower prices to lure customers away from rival producers, while still making a profit.

Question 7

incentive

Answer 7

encourages people to act in certain ways.

Question 8

price ceiling

Answer 8

is the legal maximum price that sellers may charge for a product.

Question 9

price floor

Answer 9

is a legal minimum price that buyers must pay for a product.

Question 10

minimum wage

Answer 10

is a legal minimum amount that an employer must pay for one hour of work.

Question 11

rationing

Answer 11

is a government system for allocating goods and services using criteria other than price

Question 12

black market

Answer 12

involves illegal buying or selling in violation of price controls or rationing