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
