ECON WEEK 5 Flashcards
Two Major Jobs of Price
- Rationing Device
- Transmitter of Information
Because of scarcity this is needed to
determine who gets what of the available limited resources
and goods?
rationing device
Every rationing device does not discriminate against someone. TRUE OR FALSE
FALSE
is a transmitter of information that often relates to the
relative scarcity of a good.
Price
is a government-mandated maximum price
above which legal trades cannot be made.
Price ceiling
If the price ceiling is below the equilibrium price, the
following effects may arise:
Shortages
* Fewer Exchanges
* Nonprice-rationing devices
* Buying and selling at prohibited prices
* Tie-in sales
price and output tend to
rise to equilibrium.
a shortage exist
Price ceiling prevents mutually beneficial trades. TRUE OR FALSE
TRUE
This is the first-come-first-served principle.
Nonprice-rationing devices
Because the price ceiling prevents mutually
beneficial trades, some sellers may sell at higher
prices lawfully. TRUE OR FALSE
FALSE
a sale whereby one good can be
purchased only if another good is also
purchased
Tie-in sale
Buyers prefer higher prices to lower prices. TRUE OR FALSE
FALSE
if there is a price ceiling, different effects may occur that will
force buyers to buy goods at prices higher than the price ceiling. TRUE OR FALE?
TRUE
price ceiling is a radio signal and Price blocks the signal. TRUE OR FALSE
FALSE
is a government-mandated minimum price below
which legal trades cannot be made.
Price floor
