Chapter Six Vocabulary: Prices 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; also known as excess supply
Shortage
situation in which quantity demanded is greater than quantity supplied; also known 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
