CH. 3.7 Vocabulary
What is the point of balance at which the quantity demanded equals the quantity supplied?
Equilibrium
What is another term for describing shortage from your book?
Excess Demand
The quantity of goods that a firm has on hand.
Inventory
What is a sudden shortage of a good such as gasoline or wheat.
Supply Shock
Price System: One benefit of price system that signals to producers to enter the market or raise prices.
Prices Provide Incentives
What occurs when quantity supplied is not equal to quantity demanded in a market.
What is another term for describing surplus from your book?
Excess Supply
The financial and opportunity costs that consumers pay in searching for a product or service.
Search costs
What is the system call when their is an exchange of one type of good or service for another.
Bartering
Price System: Second benefit of price system telling producers what to do.
Prices Serve as Signals
Exist when quantity demanded in a market is more than quantity supplied.
Shortage
Minimum price set by government that must be paid for a good or service.
Price Floor
An increase in a demand curve will shift the demand curve to what direction?
Demand curve will shift up and to the right.
A system of allocating goods and services using criteria other than price, is expensive and can take a long time to organize.
Rationing
Price System: Third benefit of price system is it adjust to market changes like a shift in supply or demand.
Prices are Responsive and Flexible
Exists when quantity supplied exceeds quantity demanded.
Surplus
Sets the minimum price an employer can pay its employees for labor.
Minimum wage
The demand curve will shift to what direction if the demand curve decreases?
The demand curve shifts down and to the left.
When people conduct business without regard for government controls on price or quantity.
Black Market
Price System: Fourth benefit of price system is it cost nothing to operate.
Maximum price that can be legally charged for a good or service.
Price ceiling
In the 1940's New York City introduced this.
Rent Control
What has happened to the demand of digital cameras over the last 15 years.
Demand has decreased
When was the last time the United States rationed goods.
World War II
Price System: Fifth benefit of price system is it forces producers to utilize their land, labor, and capital efficiently.
Allocate Resources Efficiently