vocab
amount of good or service producers are willing to sell at various possible prices during a given period
supply
System in which gov’t or other institution decides how to distribute a product
rationing
A situation that occurs when the quantity supplied and quantity demanded for a product are equal at same price
equilibrium
who uses prices to make informed buying decisions
consumers
Gov’t regulation that establishes a max price for a particular good
price ceiling
division of complex procedure into small tasks, enabling workers increase output through specialization
division of labor
rationing occured in the blank mainly during wars and other crisis
U.S.
Equilibrium can be found by plotting blank and blank curve on same graph
demand , supply
limitations of the price system
externalities
public goods
instability
Govt regulation establishes a min level of prices
price floor
focus of worker on only one or few aspects of production in order to improve efficiency
specialization
During blank rationed many goods such as tired, gas, meat, butter, coffee
WW2
Point on the graph where the two cross is the blank for that product
market equilibrium
price system has both blank and blank in coordinating production decisions among producers and consumers
benefits
limitations
blank boom in a city causes demand and prices for apartments to sky rocket leaving many people unable to afford rent
population
shortage
Under rationing system product distributed based on policy rather than on basis of prices determined by blank and blank
supply and demand
Equilibrium helps eliminate blank and blank
shortages and surpluses
low prices give consumers an incentive to buy more goods and services
law of demand
To prevent farmers from losing their land govt sets a base price for corn that guarantees farmers blank level of income
measured used in econommics to show responsiveness, quantity demanded of good or service to change price
price elasticity
Consequences of Rationing
unfair
expensive
create black markets
Surplus exists when the quantity supplied exceeds the quantity blank at the price offered
demanded
benefits of the price system it provides what?
information
incentives
choice
efficiency
flexibility
What’s wrong with black market
Unfair, typically pay much higher prices
Can be dangerous because unregulated
Can pose additional problems for consumers