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Prices

Prices. Chapter 6. Equilibrium - the point at which quantity demanded and quantity supplied are equal (p.125). Disequilibrium - describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market (p. 126). Chapter 6, Sect. 1.

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Prices

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  1. Prices Chapter 6

  2. Equilibrium- the point at which quantity demanded and quantity supplied are equal (p.125) Disequilibrium- describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market (p. 126) Chapter 6, Sect. 1

  3. Excess Demand- when quantity demanded is more than quantity supplied (p. 126) Excess Supply-when quantity supplied is more than quantity demanded (p. 128) Chapter 6, Sect. 1

  4. Price Ceiling- a maximum price that can be legally charged for a good or service (p.128) Price Floor- a minimum price for a good or service (p.128) Chapter 6, Sect. 1

  5. Rent Control in America Rent Control- a price ceiling placed on rent (p. 129) • Introduced in the early 1940s as a means to prevent inflation during a housing crisis created by the manufacturing boom set off by World War II. • It is now supposed to help poor households move into neighborhoods that they normally couldn’t afford. • Why isn’t this working? • What is the impact?

  6. Minimum Wage- a minimum price that an employer can pay a worker for an hour of labor (p.130) Demand for Workers Labor (millions of workers)

  7. Minimum Wage – Pro or con? Are minimum wage laws good for the economy? Who do they help? Who might they hurt? What might be the long-term effects on the overall economy?

  8. Surplus- situation in which quantity supplied is greater than quantity demanded; also known as excess supply (p.134) Shortage- a situation in which a good or service is unavailable (p. 4), or a situation in which the quantity demanded is greater than the quantity supplied (p. 136) Chapter 6, Sect. 2

  9. OR OR Search Costs- the financial and opportunity costs that con­sumers pay when searching for a good or service (p. 136) Chapter 6, Sect. 2

  10. Rationing- asystem of allocating scarce goods and services using criteria other than price (p. 141) Chapter 6, Sect. 3

  11. Black Market- a market in which goods are sold illegally (p.142)

  12. Supply Shock- a sudden shortage of a good (p. 141) Spillover Costs- costs of production that affect people who have no control over how a good is produced (p. 144)

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