last lesson Flashcards
1
Q
price ceiling
A
set a maximum price on a product, if the government believes the price of a good is too high
2
Q
price floor
A
set a minimum price on a product, if the government believes that the price of a good is too low
3
Q
subsidy or quota
A
if the government must intervene for social or environmental reasons
4
Q
if the ceiling price is below equilibrium
A
a shortage will be the result
5
Q
what are 2 problems
A
black market and product quality will be lowered
6
Q
floor price above equilibrium will
A
create a surplus. consumers will be forced to pay more and receive less for the money.
7
Q
subsidy
A
a grant of money made to a particular industry by the
government.
8
Q
quota
A
a restriction placed on the amount of a product an individual producer is allowed to make.
