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Flashcards in Adobe Ch. 3 Deck (47)
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31

excess supply or surplus means

ny price above equilibrium price; q supplied greater than q demanded

32

excess demand or shortage

any price below equil. price, q demanded greater than q supplied

33

exccess demand is

shortage

34

excesss supply is

surplus

35

equilibrium is when

quantity supplied euqals quantity demanded

36

when shift of demand and supply are same direction...

equilibrium price is indeterminante

37

when shift of demand and supply are opposite directions

equilibrium quatnity is indeterminte

38

price ceiling

sets max legal price seller can charge for product

39

price ceiling above equilibrium price has

no effect and is nonbinding

40

price ceiling below equilibrium price

upsets equilibrium, is binding-- causes shortage

41

PRICE CEILING BELOW EQUILIBRIUM PRICE CAUSES

SHORTAGE

42

what can gov do if there is persistent shortage

issue ration coupons, black markets might occur

43

price floor

sets min legal price set by goverment

44

price floor above equilibrium price

upsets equilibrium, binding causes surplus

45

price floor below equilibrium price

no effect on market, is non binding

46

PRICE FLOOR BELOW EQUIL PRICE CAUSES

SURPLUS

47

if tehre is persistent surplus, gov can do what

supply control, demand exapnsion, government purchases