CHAPTER 6: Supply, Demand, and Government Policies Flashcards
1
Q
a legal maximum on the price at which a good can be sold
A
price ceiling
2
Q
he government imposes a price ceiling of $4 per cone. In this case, because the price that balances supply and demand ($3) is below the ceiling, the price ceiling is _____
A
not binding
2
Q
a legal minimum on the price at which a good can be sold
A
price floor
3
Q
In this case,
the government imposes a price ceiling of $2 per cone. Because the equilibrium price of $3 is above the price ceiling, the ceiling is a _______ on the market.
A
binding constraint
4
Q
laws dictate the lowest price for labor that any employer may pay
A
minimum wage
5
Q
a binding price floor causes a
A
surplus
6
Q
the manner in which the burden of a tax is shared among participants in a market
A
tax incidence
7
Q
A
8
Q
A
9
Q
A
9
Q
A
10
Q
A
11
Q
A
11
Q
A
12
Q
A
