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Price system

maybe I'll pass.
STUDY
PLAY
In a free market, the prices are usually the result of competition (tf)
TRUE
Prices serve as a link between the producer and consumer (tf)
TRUE
Prices tend to be in favor of the producer (tf)
FALSE
A market economy adjusts to unexpected events by adjusting consuption and production (tf)
TRUE
In a market economy, a high price is a signal for producers to offer less and consumers to buy more (tf)
FALSE
An advantage of a free market is that the market finds its own equilibrium (tf)
TRUE
Markets are used to "talk" when prices move up or down significantly (tf)
TRUE
In a market economy, a low price is a signal for producers to supply more and consumers to buy less (tf)
FALSE
An advantage of a free market is price flexibility (tf)
TRUE
The adjustment process in a competitive market moves toward the equilibrium (tf)
TRUE
If the demand is unchanged and supply increases, the new equilibrium price will be higher than the old one (tf)
FALSE
If the cost of building materials increases, the supply curve for new homes is likely to shift to the right (tf)
False
The point where the supply curve and the demand curve intersect is called market equilibrium (tf)
TRUE
High prices will result in surpluses (tf)
TRUE
Low prices will result in shortages (tf)
TRUE
A price floor that is set too high will cause a shortage (tf)
FALSE
The minimum wage is an example of a price floor (tf)
TRUE
The minimum wage is an example of a price floor (tf)
TRUE
If a market is at equilibrium, and there is a sudden increase in demand, then
a temporary shortage will occur and the price will rise.
Relatively small changes in supply (both increases and decreases) will have the smallest impact on price when
demand is elastic
What is the equilibrium price in a market?
The price that creates neither a shortage nor a surplus
The adjustment process in a competitive market continually moves toward
equilibrium
Relatively small changes in supply (both increases and decreases) will have the greatest impact on prices
demand is inelastic
What happens when wages are set above the equilibrium level by law?
Firms employ fewer workers than they would at the equilibrium wage
On which kinds of goods do governments generally place price ceilings?
those that are essential but too expensive for some consumers
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?
equilibrium
Which of the following is an example of a good whose price goes down because of improvements in technology?
computer printers
What happens when the supply of a nonperishable good is greater than the consumer wants to buy?
the good becomes a luxury and the price rises
Which of the following is a situation that makes the market behave inefficiently?
when consumers do not have enough information to make good choices
What happens to a market in equilibrium when there is an increase in supply?
Quantity supplied will exceed quantity demanded, so the price will drop
What is the name of the smallest amount that can legally be paid to most workers for an hour of work?
minimum wage
The price ceiling that was used to control the price of housing in New York City and other cities was called which of the following?
rent control
According to Figure 6.2, in this market, a price of $1.50 would be
equilibrium
According to Figure 6.2, at the equilibrium price, how many slices of pizza will be sold?
200
The price of a slice of pizza is $2.50. At the end of the day, how many unsold slices of pizza will be left, according to Figure 6.2?
200
If the government set a price of $2.00 a slice, how many slices of pizza will be sold each day, according to Figure 6.2?
150
a sudden lack of goods
supply shock
the smallest amount, by law, that can be paid to a worker for an hour of labor
minimum wage
a price ceiling placed on the amount people pay for housing
rent control
a maximum amount that can be legally charged for a good or service
price ceiling
when quantity supplied is more than quantity demanded
excess supply
when quantity supplied and quantity demanded are not the same in a market
disequilibrium
situation in which quantity demanded is greater than quantity supplied
shortage
the financial and opportunity costs consumers pay when looking for a good or service
search costs
when quantity demanded is more than quantity supplied
excess demand
a sudden lack of availability of a good
supply shock
a system of allocating scarce goods and services using some criteria other than price
rationing
costs of production that affect people who have no control over how much of a good is produced
spillover costs
situation in which quantity supplied is greater than quantity demanded
surplus
the financial and opportunity costs consumers pay when looking for a good or service
search costs
a minimum price for a good or service
price floor
the point at which quantity supplied and quantity demanded are the same
equilibrium