Supply AND Demand Flashcards
The price at which quantity demanded and quantity supplied are equal
Equilibrium price
On the graph the __________ axis shows the various prices at which goods are offered for sale and bought
Vertical
The ____________ axis shows the quantity of goods
Horizontal
The result of quantity demanded being greater than quantity supplied
shortage
The result of quantity demanded being less than quantity supplied
Surplus
As buyers and sellers interact, the market moves toward ______________
Market equilibrium
When there is a shortage, producers _____ prices in an attempt to balance quantity supplied and quantity demanded
Raise
When there is a surplus, producers _____ prices in an attempt to balance quantity supplied and quantity demanded
Lower
The legal maximum price that sellers may charge for a product
Price ceiling
Legal minimum price that buyers must pay for a product
Price floor
A legal minimum amount that an employer must pay for one hour of work
Minimum wage
A system in which the govt allocates goods and services using factors other than price
Rationing
Involves illegal buying or selling in violation of price controls or rationing
Black market
A __________________ occurs below equilibrium
Binding price ceiling
A __________________ occurs above equilibrium
Binding price floor
