Chapter 6 Flashcards
Equilibrium
The point at which quantity demanded and quantity supplied are equal
Disequilibrium
Describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market
Excess demand
When quantity demanded is more than quantity supplied
Excess supply
When quantity supplied is more than quantity demanded
Price ceiling
A maximum price that can be legally charged for a good or service
Price floor
A minimum price for a good or service
Rent control
A price ceiling placed on rent
Minimum wage
A minimum price that an employer can pay a worker for an hour of labor
Surplus
Situation in which quantity supplied is greater than quantity demanded; excess supply
Shortage
Situation in which quantity demanded is greater than quantity supplied; excess demand
Search costs
The financial and opportunity costs consumers pay when searching for a good or service
Supply shock
Sudden shortage of a good
Rationing
System of allocating scarce goods and services using criteria other than price
Black market
Goods sold illegally
Spillover costs
Costs of production that affect people who have no control over how much a good is produced
