Supply, Demand, & Price Flashcards
(19 cards)
as buyers and sellers interact, the market moves toward ______
market equilibrium
______ is the price at which quantity demanded and the quantity supplied are equal
market equilibrium
______ is the result of quantity supplied being greater than quantity demanded (above equilibrium)
surplus
______ is the result of quantity demanded being higher than quantity supplied (below equilibrium)
shortage
a decrease or increase in demand causes a ______ relationship with the change of equilibrium
direct
a decrease or increase in supply causes an ______ relationship with the change of equilibrium
inverse
______ is the legal maximum price that sellers may charge for a product
price ceiling
______ is a legal minimum price that buyers must pay for a product
price floor
______ is a legal minimum amount that an employer must pay for one hour of work
minimum wage
______ is a system in which the government allocates goods and services using factors other than price
rationing
______ involves illegal buying or selling in violation of price controls or rationing
black market
A binding price ceiling occurs ______ equilibrium
below
A binding price floor occurs ______ equilibrium
above
______ occurs when producers sell goods and services at prices that best balance the twin desires of making the highest profit and luring consumers away from rival producers
competitive pricing
four characteristics of the price system
neutral, market driven, flexible, efficient
an ______ encourages people to act in certain ways
incentive
for producers, the price system has two great advantages
information and motivation
______ act as signals and incentives to consumers
prices
______ rely on the consumer perception that a certain logo is worth a higher price
brand marketers
