Chapter 4 Flashcards
1
Q
Government Controlled Price
A
When the government is not happy with the free market price they will set it at a different level
2
Q
Price Floor
A
Minimum price, helps sellers, has to be above equilibrium, creates a surplus, demand determines the amount traded in market
3
Q
Price Ceiling
A
Maximum price, helps buyers, has to be below equilibrium, creates a shortage, can create a black market, supply determines the amount traded in market
4
Q
Quota
A
Limit on the quantity supplied, must be less than equilibrium quantity to be binding
5
Q
Surplus
A
Excess supply in the market, pressure on price to go down
6
Q
Shortage
A
Excess demand in the market, pressure on price to go up
7
Q
Indeterminate
A
It is unknown what the effect on a variable is
