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Ch 8 Econ
Terms in this set (10)
the condition in which demand is greater than supply at a certain price
the condition in which supply is greater than demand at a certain price
a lowering of price
the price at which the quantity demanded equals the quantity supplied
the quantity that is both demanded and supplied at the equilibrium price
what happens if demand stays the same and supply decreases?
price will go up; quantity exchanged will be less
in what ways may the government block the market system?
allowing only a certain amt of imported steel to enter the economy, cutting down on supply and resulting in a higher steel price; buy grain products, increasing demand and resulting in higher price; setting rent controls to keep rents below the market level; setting a minimum wage because it believes the free market wage is too low
a minimum price set by government that is above the market equilibrium price
why does a price floor have to be above the equilibrium price?
it would not be useful otherwise, since it would already be below the natural market price
a maximum price set by government that is below the market equilibrium price
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