The Market Flashcards
1
Q
Market definition
A
Anyplace buyers and sellers get together to negotiate price and quantity
2
Q
Shortage
A
More demand than supply
Below equilibrium
3
Q
Surplus
A
More supply than demand
About equilibrium
4
Q
Five roles of the price system
A
Incentives Resource allocation Stop and go signals Free flexible and quick price signals Narrows choices
5
Q
Price floor
A
Minimum price set my gov
Creates surplus
Hurts consumer
Above equilibrium
6
Q
Price ceiling
A
Max price that can legally be charged
Below equilibrium
Hurts producers
