Chapter 4 - Demand and Supply Applications Flashcards Preview

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Flashcards in Chapter 4 - Demand and Supply Applications Deck (10)
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1
Q

price ceiling

A

A maximum price that sellers may charge for a good, usually set by government.

2
Q

queuing

A

Waiting in line as a means of distributing goods and services: a nonprice rationing mechanism.

3
Q

favored customers

A

Those who receive special treatment from dealers during situations of excess demand.

4
Q

ration coupons

A

Tickets or coupons that entitle individuals to purchase a certain amount of a given product per month.

5
Q

black market

A

A market in which illegal trading takes place at market-determined prices.

6
Q

price floor

A

A minimum price below which exchange is not

permitted.

7
Q

minimum wage

A

A price floor set for the price of labor.

8
Q

consumer surplus

A

The difference between the maximum amount a person is willing to pay for a good and its current market price.

9
Q

producer surplus

A

The difference between the current market price and the full cost of production for the firm.

10
Q

deadweight loss

A

The total loss of producer and consumer surplus from underproduction or overproduction.