Quiz 1 Flashcards
What is the price at which quantity demanded and the quantity supplied are equal
equilibrium price
As buyers and sellers interact the market, the market moves toward
Market equilibrium
The vertical axis shows price
The horizontal axis shows the quantity demanded or supplied
____ is the result of quantity supplied being greater than the quantity demanded
Surplus
____ is the result of quantity demanded being greater than the quantity supplied
Shortage
____ occurs when producers sell goods and services at prices that best balance the twin desires of making the highest profit and luring consumers away from rival producers
Competitive pricing
Four characteristics of the price system
Neutral
Market driven
Flexible
Efficient
A _____ encourages people to act a certain way
Incentive
For producers the price system has 2 great advantages
Information and motivation
Prices act as ___ and ______ to consumers
Signals and incentives
A ___ is the legal maximum price that sellers may charge for a product
Price ceiling
A ____ is a legal minimum price that buyers must pay for a product
Price floor
The ____is a legal minimum amount that an employer must pay for one hour of work
Minimum wage
is a system in which the government allocates goods and services using factors other than price
Rationing
A ____involves illegal buying or selling in violation of price controls or rationing
Black market
