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19 Cards in this Set
- Front
- Back
"Price controls"
(p. 118) |
__________ are legal restrictions on how high or low a market price may go. They can take two forms:
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"Price ceiling"
(p. 118) |
A ________, a maximum price sellers are allowed to charge for a good or service.
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"Price floor"
(p. 118) |
________, a minimum price buyers are required to pay for a good or service.
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"Deadweight loss"
(p. 121) |
_________ is the loss in total surplus that occurs whenever an action or a policy reduces the quantity transacted below the efficient market equilibrium quantity.
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"Inefficient allocation to consumers"
(p. 123) |
Price ceilings often lead to inefficiency in the form of ____________: people who want the good badly and are willing to pay a high price don't get it, and those who care relatively little about the good and are only willing to pay a low price do get it.
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"Wasted resources"
(p. 123) |
Price ceilings typically lead to inefficiency in the form of ___________: people expend money, effort, and time to cope with the shortages caused by the price ceiling.
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"Inefficiently low quality"
(p. 124) |
Price ceilings often lead to inefficiency in that the goods being offered are of ____________: sellers offer low-quality goods at a low price even though buyers would prefer a higher quality at a higher price.
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"Black markets"
(p. 125) |
A ____________ is a market in which goods or services are bought and sold illegally--either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling.
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"Minimum wage"
(p. 127) |
The ____________ is a legal floor on the wage rate, which is the market price of labor.
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"Inefficient allocation of sales among sellers"
(p. 130) |
Price floors lead to ____________: those who would be willing to sell the good at the lowest price are not always those who actually manage to sell it.
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"Inefficiently high quality"
(p. 130) |
Price floors often lead to inefficiency in that good of ____________ are offered: sellers offer high-quality goods at a high price, even though buyers would prefer a lower quality at a lower price.
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"Quantity control"
(p. 133) |
A __________ or quota, is an upper limit on the quantity of some good that can be bought or sold.
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"Quota"
(p. 133) |
A quantity control or _________, is an upper limit on the quantity of some good that can be bought or sold.
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"Quota limit"
(p. 133) |
The total amount of a good that can be legally transacted is the ____________.
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"License"
(p. 133) |
A _______ gives its owner the right to supply a good.
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"Demand price"
(p. 134) |
The ____________ of a given quantity is the price at which consumers will demand that quantity.
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"Supply price"
(p. 135) |
The ____________ of a given quantity is the price at which producers will supply that quantity.
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"Wedge"
(p. 136) |
A quantity control, or quota, drives a _______ between the demand price and the supply price of a good; that is, the price paid by buyers ends up being higher than that received by sellers.
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"Quota rent"
(p. 136) |
The difference between the demand and supply price at the quota limit is the ___________, the earnings that accrue to the license-holder from ownership of the right to sell the good. It is equal to the market price of the license when the licenses are traded.
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