Ch.6 Prices

What causes price changes most of the time?

• government policy

• changes in supply and demand

• changes in supply only

• changes in demand only

What is the highest legal price that can be charged for a product?

• price ceiling

• price floor

• equilibrium price

• monetary value of a product

Price floor for agricultural products set by the government to stabilize farm prices

• target price

• equilibrium quantity

• rationing

• equilibrium price

How do economists analyze behavior and predict outcomes?

• surplus

• economic model

• equilibrium price

• equilibrium quantity

Minimum wage is an example of a...

• price floor

• price ceiling

• equilibrium price

• rationing

In a competitive market, prices are generally....

• favorable for consumers

• favorable for producers

• neutral

• inelastic

What do most economists believe is the most efficient way to allocate resources?

• rationing

• government action

• competitive markets

• distorted incentives

A system of allocating goods and services without prices...

• surplus

• shortage

• rationing

• target price

Monetary value of a product

• surplus

• shortage

• rationing

• price

When the quantity supplied equals the quantity demanded, what has occured?

• prices increase

• equilibrium

• prices decrease

• there is a shortage