Market Equilibrium Flashcards
The characteristic of a good other than the market price; change in this changes the relationship between price and quantity demanded/supplied
Nonprice determinant
True/False: Supply/Demand curve shifts left/right when there’s a change in npd of supply/demand
True
When there’s a change in npd of supply…
Supply curve shifts and there’s movement along the demand curve
When both supply and demand change, we can determine how price or quantity will change, (but not both/only one)…
But not both
Max legal price set above the existing equilibrium price (no market effect)
Nonbinding price ceiling
Max legal price set below existing equilibrium price (restricts trade)
Binding price ceiling
Min legal price et below existing equilibrium price (no market effect)
Nonbinding price floor
Min legal price set above existing equilibrium price (restricts trade)
Binding price floor
The nonbinding price ceiling is set above/below the existing equilibrium
Above
The binding price ceiling is set above/below the existing equilibrium
Below
The nonbinding price floor is set above/below the existing equilibrium
Below
The binding price floor is set above/below the existing equilibrium
Above
True/False: Tax doesn’t change any npd of the demand of a good
True
