Chapter 6- Supply, Demand, & Gov't Policies Flashcards
1
Q
Price Ceiling
A
a legal maximum on the price at which a good can be sold
2
Q
Price Floor
A
a legal minimum on the price at which a good can be sold
3
Q
When the government imposes a binding price ceiling on a competitive market….
A
a shortage of the good arises, and sellers must ration the scarce goods among the large number of potential buyers
4
Q
Binding a price floor causes a…
A
Surplus
5
Q
Price Ceilings result in a…
A
Shortage
6
Q
Price controls are often aimed at helping the….
A
Poor
7
Q
Tax Incidence
A
when the burden of a tax is shared among participants in a market- various people who make up the economy
8
Q
Taxes levied on sellers and taxes levied on buyers are…
A
equivalent
9
Q
A tax burden falls more heavily on the side of the market that is….
A
Less elastic
