EC102 Finals Flashcards
1
Q
legal maximum price at which a good can be sold
A
price ceiling
2
Q
price ceiling set above the equilibrium price
A
not binding
3
Q
price ceiling set below the equilibrium price
A
binding
4
Q
legal minimum price at which a good can be sold
A
price floor
5
Q
price floor set above the equilibrium price
A
binding
6
Q
price floor set below the equilibrium price
A
not binding
7
Q
lowest price at which an employer pays their employees
A
minimum wage
8
Q
ceilings placed on rent
A
rent control
9
Q
taxes
A
- raise revenue for public projects
- discourage market activity (when a good is taxed, a smaller quantity is sold)
10
Q
burden of a tax is shared by participants in a market
A
tax incidence
11
Q
reflects the way the market allocates scarce resources
A
market equilibrium
