Unit 2 Vocab (Page 3)

Question 1

Shortage:

Answer 1

When the amount supplied is less than the amount demanded

Question 2

Surplus:

Answer 2

When the amount supplied is more than the amount demanded

Question 3

Producer Surplus:

Answer 3

Benefit producers get from selling at a higher price than the price at which they would be willing to sell

Question 4

Consumer Surplus:

Answer 4

Benefit consumers get when they pay less for a good/service than what they would be willing to pay

Question 5

Market Imbalances:

Answer 5

Uneven distribution between supply and demand

Question 6

Disequilibrium:

Answer 6

State of imbalance in a market/economy

Question 7

Subsidies:

Answer 7

Benefits given by the government to businesses or individuals

Question 8

Quota:

Answer 8

A restriction on the quantity of a good that can be imported over a certain period

Question 9

Deadweight Loss:

Answer 9

A loss in economic efficiency

Question 10

Excise Tax:

Answer 10

A per-unit tax

Question 11

Tariff:

Answer 11

A tax placed on a good or service being imported or exported

Question 12

Import Quota:

Answer 12

A restriction on the quantity of a good that can be imported into a country

Question 13

Free Trade:

Answer 13

Policy that allows countries to exchange goods/services

Question 14

Restricted Trade:

Answer 14

Policies that limit the free exchange of goods/services between countries