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26 Cards in this Set

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  • Back
What happens when wages are set above the equilibrium level by law?
Firms employ fewer workers
than they would at the equilibrium wage.
On which kinds of goods do governments generally place price ceilings?
those that are essential but too expensive for some consumers
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?
equilibrium
Which of the following is an example of a good whose price goes down because of improvements in technology?
computer printers
What happens when the supply of a nonperishable good is greater than the consumer wants to buy?
the good becomes a luxury and the price rises
Why did communist governments use a command economic system for many years?
in an attempt to create a society in which everyone was equal
Why did the U.S. government use rationing for some foods and consumer goods during World War II?
to guarantee each civilian a minimum standard of living in wartime
Which of the following is a situation that makes the market behave inefficiently?
when consumers do not have enough information to make good choices
What happens to a market in equilibrium when there is an increase in supply?
quantity supplied will exceed quantity demanded, so the price will drop
What is it called when the government uses some tool other than money to allocate goods?
rationing
What is the name of the smallest amount that can legally be paid to most workers for an hour of work?
minimum wage
The price ceiling that was used to control the price of housing in New York City and other cities was called?
rent control
the smallest amount, by law, that can be paid to a worker for an hour of labor
minimum wage
a maximum amount that can be legally charged for a good or service
price ceiling
a sudden lack of goods
supply shock
when quantity supplied is more than quantity demanded
excess supply
situation in which quantity demanded is greater than quantity supplied
shortage
a price ceiling placed on the amount people pay for housing
rent control
the financial and opportunity costs consumers pay when looking for a good or service
search costs
when quantity supplied and quantity demanded are not the same in a market
disequilibrium
costs of production that affect people who have no control over how much of a good is produced
spillover costs
when quantity demanded is more than quantity supplied
excess demand
situation in which quantity supplied is greater than quantity demanded
surplus
a minimum price for a good or service
price floor
a system of allocating scarce goods and services using some criteria other than price
rationing
the point at which quantity supplied and quantity demanded are the same
equilibrium