Chapter 4 - Demand and Supply Applications Flashcards Preview

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Flashcards in Chapter 4 - Demand and Supply Applications Deck (10):
1

price ceiling

A maximum price that sellers may charge for a good, usually set by government.

2

queuing

Waiting in line as a means of distributing goods and services: a nonprice rationing mechanism.

3

favored customers

Those who receive special treatment from dealers during situations of excess demand.

4

ration coupons

Tickets or coupons that entitle individuals to purchase a certain amount of a given product per month.

5

black market

A market in which illegal trading takes place at market-determined prices.

6

price floor

A minimum price below which exchange is not
permitted.

7

minimum wage

A price floor set for the price of labor.

8

consumer surplus

The difference between the maximum amount a person is willing to pay for a good and its current market price.

9

producer surplus

The difference between the current market price and the full cost of production for the firm.

10

deadweight loss

The total loss of producer and consumer surplus from underproduction or overproduction.