Ch. 10
If the quantity supplied is greater than quantity demanded, there is a
Surplus
A decrease in the price of equipment will alter the market for wheat by a
rightward shift in supply
When the government sets up a minimum price in an agriculture market through some policy, it is a called a
Price support
shortage
If the price is higher than the equilibrium price, then
There is a surplus
An effective price floor is _________ equilibrium price.
above
In order for a price ceiling to be effective, it needs to be
below equilibrium
The type of economics that looks at the impact of the government's policies on consumers and producers is called
welfare economics
An increase in the price of fertilizer will alter the market for wheat by a
leftward shift of supply
If there is an decrease in income and the market being studied is an inferior good, what happens to equilibrium price and quantity?
EP increases
EQ increases
A measure of the well-being of producers is
producer surplus
A price ceiling has what effect on producer and consumer surplus?
Decreases PS
Increases CS
If there is a rightward shift of demand, we know for sure will happen to equilibrium price and quantity?
They will both increase
If demand has a rightward shift but supply has a larger rightward shift, what happens to equilibrium price and quantity?
EP- decreases
EQ- increases
An effective price floor will have what effect on producer and consumer surplus?
If a market is at equilibrium, how much DWL is there?
Zero
What happens if both supply and demand shift rightward equal amounts?
Equilibrium price stays the same while equilibrium quantity increases
A change in the price of a product will cause either a change in demand or a change in quantity demanded. Which is it?
A change in quantity demanded
In terms of surplus, an action that causes a movement in the market will create
Dead weight loss
A tax on imports is called_____________
A limit on the amount of imports is called___________
tariff
import quota