Chapter 6 Key Terms All 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 demand in a market.
Excess demand
When quantity demand in more than quantity supplied.
Excess supply
When quantity supplied is more than quantity demand.
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 demand, also know as excess supply.
Shortage
A situation in which a good or service is unavailable or a situation in which the quantity demand is greater than the quantity supplied, also know as excess demand.
Search costs
The financial and opportunity costs consumers pay when searching for a good or service.
Supply shock
A sudden shortage of a good.
Rationing
A system of allocating scarce goods and services using criteria other than price.
Black market
A market in which goods are sold illegally.
Spillover costs
Costs of production that affect people who have no control over how much of a good is produced.
