CHPT 6 Definitions Flashcards
Equilibrium
the point at which the demand or a product or service is equal to the supply of that product or service
Shortage
When quantity demanded is greater than quantity supplied
disequilibrium
any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in the market
surplus
When quantity supplied is more than quantity demanded
price ceiling
A maximum price that can legally be charged for a good or service
Rent control
a price ceiling placed on apartment rent
price floor
a minimum price for a good or service
Minimum Wage
a minimum price that an employer can pay a worker for one hour of labor
Inventory
The quantity of goods that a firm has on hand
Fad
a product that is popular f0or a short period of time
Search costs
the financial and opportunity costs that consumers pay when searching for a good or service
supply shock
a sudden shortage of good
rationing
a system of allocating scarce goods and services using criteria other than price
Black Market
a market in which goods are sold illegally, without regard for government controls on price or quantity
