Chap 4 Macro
Terms in this set (24)
When the _______ curve shirts outward or inward with an unchanged ______ curve, equilibrium price and quantity increase or decrease, respectively. When the ______ curve shifts outward or inward given an unchanged __________ curve, equilibrium price moves in the direction opposite to equilibrium quantity.
When there is a shift in demand or supply, the new equilibrium price is not obtained _______. Adjustment takes ______.
Prices in a market economy perform a rationing function because they reflect relative scarcity, allowing the market to clean. Other ways to ration goods include ____ _____, ________ _____________, _________ __________, ___________ _____________, ________ _____________, and ____________.
first come first served
Even when business people can change prices, some rationing by waiting may occur. Such _______ arrises when there are large changes in demand coupled with high costs of satisfying those changes immediately.
Government sometimes impost price controls in the form of price _________ and price ______.
an effective price ________ is one that sets the legan price below the market clearing price and is enforced.
Effecive price _______ lead to nonprice rationing devices and black markets.
_______ prices perform three functions 1 allocating exsisiting scarce housing among competinf claimats, 2 promoting efficient maintenance of exsisiting houses and stimulating new housing consturction and 3 rationing the use of existing houses by current demanders
Effective rent ________ impede the functioning of rental prices. Construction of new rental units is discouraged. Rent _____ decrease spending on maintenance of existing cones and also lead to housing gridlock
There are numerous way to evade rent controls _______ _________ is one
With a price-_______ system, the government sets a minimum price at which say qualifying farm products can be sold. Any farmers who cannot sell at that price in the market can "sell" their surplus to the government. The only way a price ________ system can survive is for the government or some other entity to buy up the excess quantity suppled the support price.
When a _____ is place on wages at a rate that is above market equilibrium, the results is an excess quantity of labor supplied at that minimum wage.
Quantity restrictions may take the form of _____ ______, which are limits on the quantity of specific foreign goods can be brought into the US fo resale purposes.
an economic system in which relative prices are constantly changing to reflect changes in supply and demand for different commodities. The prices of those commodities are signals to everyone within the system as to what is relatively scarce and what is relatively abundant
an act of trading, done on an elective basis, in which both parties to the trade expect to be better off after the exchange
all of the costs associated with exchange including the informational costs of finding out the price and quality, service record and durability of a product, plus the cost of contacting and enforcing that contract
government mandated minimum or maximum prices that may be charged for goods and services
a legal maximum price that may be charged for a particular good or service
a legal minimum price below which a good or service may not be sold. Legal minimum wages are an example
non price rationing devices
all methods used to ration scarce goods that are price controlled. Whenever the price system is not allowed to work, non price rationing devices will evolved to ration the affected goods and services.
a market which goods are traded at prices above their legal maximum prices or in which illegal goods are sold
price ceilings on rent
a wage floor legislated by government setting the lowest hourly rate that firms may legally pay workers
a physical supply restriction on imports of a particular good, such as sugar. Foreign exporters are unable to sell in the US more than quality specified in the import quota