Term
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Definition
| Legal restrictions on how high or low a market price may go |
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Term
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Definition
| A maximum price sellers are allowed to charge for a good or service |
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Term
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Definition
| A minimum price buyers are required to pay for a good or service |
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Term
| Inefficient allocation to consumers |
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Definition
| People who want the good badly & are willing to pay a high price don't get it, & those who care relatively little about the good & are only willing to pay a low price do get it |
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Definition
| People expend money, effort, & time to cope with the shortages caused by the price ceiling |
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Term
| Inefficiently low quality |
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Definition
| Sellers offer low-quality goods at a low price even though buyers would prefer a higher quality at a higher price |
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Term
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Definition
| A market in which goods or services are bought & sold illegally - either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling |
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Term
| _____ take the form of either legal maximum prices - price ceilings - or legal minimum prices - price floors |
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Definition
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Term
| A price ceiling below the equilibrium price benefits successful buyers but causes predictable adverse effects such as persistent shortages, which lead to four types of inefficiencies: inefficiently low quantity transacted, _____, ____, & _____ |
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Definition
| Inefficient allocation to consumers, wasted resources, inefficiently low quality |
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Term
| Price ceilings also lead to _____, as buyers & sellers attempt to evade the price controls |
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Definition
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Term
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Definition
| A legal floor on the wage rate, which is the market price of labor |
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Term
| Inefficient allocation of sales among sellers |
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Definition
| Those who would be willing to sell the good at the lowest price are not always those who actually manage to sell it |
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Term
| Inefficiently high quality |
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Definition
| Sellers offer high-quality goods at a high price, even though buyers would prefer a lower quality at a lower price |
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Term
| The most familiar price floor is the _____ |
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Definition
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Term
| A price floor above the equilibrium price benefits successful sellers but causes predictable adverse effects such as persistent surplus, which leads to four kinds of inefficiencies: inefficiently low quantity transacted, _____, wasted resources, & _____ |
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Definition
| Inefficient allocation of sales among sellers, inefficiently high quality |
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Term
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Definition
| An upper limit on the quantity of some good that can be bought or sold |
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Term
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Definition
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Term
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Definition
| The total amount of the good that can be legally transacted |
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Term
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Definition
| Gives its owner the right to supply a good |
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Term
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Definition
| The price at which consumers will demand that quantity |
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Term
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Definition
| The price at which producers will supply that quantity |
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Term
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Definition
| The price paid by buyers ends up being higher than that received by sellers |
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Term
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Definition
| The difference between the demand & supply price at the quota limit |
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Term
| _____, or quotas, are government-imposed limits on how much if a good may be bought or sold |
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Definition
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Term
| The quantity allowed for sale is the _____ |
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Definition
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Term
| The government then issues a _____ - the right to sell a given quantity of a good under the quota |
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Definition
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Term
| When the quota limit is smaller than the equilibrium quantity in an unregulated market, the _____ is higher than the supply price - there is a wedge between then at the quota limit |
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Definition
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Term
| The wedge is the _____, the earnings that accrue to the license-holder from ownership of the right to sell the good |
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Definition
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