A Price Ceiling Is Quizlet
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In the long term, bread consumers will choose substitutes for the expensive bread offered on the black market. Consumers are more flexible in the long term, and more of them will seek out substitutes for expensive black market bread.) In the long term, bread consumers will demand more bread offered on the black market, which will increase the illegal price of bread. good. In the long term, the black market price will decrease, although it will still be above the ceiling price.) (While consumers will initially take advantage of the low price of bread and increase the aggregate quantity demanded, this will lead to a shortage of the product which will eventually lead consumers to find bread substitutes.)Chapter 05
a) If the government reduces production below the free market level, consumer surplus will decline. b) If the government reduces production below the free market level, producer surplus will decrease. c) If the government increases production above the free market level, consumers will derive no benefit from the additional units of production. d) If the government increases production above the free market level, some units of production will cost more to produce than the value attributed to them by consumers. d) To have an effect, the ceiling price must be set at a level higher than the initial market price. d) The difference between S+tax and S will be all that is necessary to show that the equilibrium price for consumers increases by £5. a) At the point on S below the point where S+tax intersects D. b) At the point where S intersects D. c) At the point where S+tax intersects D. d) At the original price minus the amount of tax. a) The incidence that falls on consumers plus the incidence that falls on producers equals the amount of the tax. b) The incidence falls more heavily on producers than on consumers if the demand curve is flatter than the supply curve. c) The incidence falls more heavily on consumers than on producers if the supply curve is flatter than the demand curve.The Price Mechanism (Revision Quizlet Activity)
Key terms to reviewBid price: Minimum price at which a security, commodity or currency is offered for sale on a market.
Black market: Illegal market in which the market price is above a legally imposed ceiling price
Cyclical demand: demand that varies depending on the stage of the business cycle an economy is in
Imbalance: price where supply and demand are out of balance
Excess demand: Difference between the quantity supplied and the greatest quantity demanded when the price is set below the equilibrium price
Oversupply: when there is unsold stock at the current market price
Inventory: Unsold products, finished and unfinished, and the raw materials used to manufacture them. Market incentives: Signals that motivate actors to change their behavior, perhaps in the direction of greater efficiency or greater profit
Price mechanism: Means by which consumer and business decisions interact to determine the allocation of resources
Rationing function: a means of allocating scarce goods and services when market demand exceeds available supply
Shortage: situation in which the quantity demanded is greater than the quantity supplied.
Signal Function: When a changing price in a market sends important information to BOTH producers and consumers.
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a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. a. True b. True b. a. True b. a. True b. True b. True b. True b.A Price Ceiling Is A Government-Mandated Quizlet
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The Price Mechanism (Revision Quizlet Activity)
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