Economics Ch. 6 Guided Notes
legal
A price AT or ABOVE a price floor is ___.
illegal
A price BELOW a price floor is ____.
balance
At equilibrium price, supply and demand are in __.
quantity demanded
At equilibrium quantity, the amount of a good or service supplied by producers balances the ___ by consumers.
negotiated
In a competitive market, prices are ___.
governments
On occasion, ____ intervene in the market in an attempt to influence prices.
equilibrium price
PRICE marked by the equilibrium point
producers
Price floors are meant to push prices up, ensuring that ____ receive a benefit for providing a good or service.
equilibrium quantity
QUANTITY marked by the equilibrium point on the graph
consumers and producers
The interaction between ___ and ____ automatically pushes the market price (what a willing consumer pays to a willing producer) of a good or service toward the equilibrium price
equilibrium price
The interaction between consumers and producers automatically pushes the market price (what a willing consumer pays to a willing producer) of a good or service toward the ______ ________.
consumers and producers
The reason the government uses price controls is because the government is subject to persuasion by ____ and ______.
low
To economists, excess demand is a sign that a price of a good or service is set too ___.
price ceiling
When a government wants to keep prices from going too high, it sets a ____ _____.
excess supply
While price floors may benefit some people, the larger effect of a price floor is ____ ____.
price floor
a minimum price consumers are required to pay for a good or service
minimum wage
government-imposed legal floor on the hourly wage rate, which is the market pays for labor (price floor)
quantity supplied
is equal to quantity demanded at market equilibrium
quantity demanded
is equal to quantity supplied at market equilibrium
price controls
limits on how high or low certain prices may be set by the government
price ceiling
maximum price consumers are required to pay for a good or service
surplus
occurs when there are too few consumers willing to pay producers what they are asking for their goods
shortage
occurs when there are too many consumers chasing too few goods
market equilibrium
point where quantity of a good or service that consumers are willing and able to buy equals the quantity that producers are willing and able to sell
market equilibrium
point where the interaction of demand and supply drives prices to
illegal
price AT or ABOVE a price ceiling is ___.
legal
price BELOW a price ceiling is ___.
excess demand
quantity demanded at a specific price exceeds quantity supplied
excess supply
situation in which the quantity supplied at a specific price exceeds the quantity demanded
market price
what a willing consumer pays to a willing producer
shortage
what consumers experience an excess demand as
surplus
what producers experience with excess supply
price floor
when a government wants to keep prices low, it sets this
supply = demand
when consumers and producers both come away satisfied
