POB OBJ 5.01 F Vocab

Demand price

• The maximum price buyers are willing and able to pay for a product

• The situation that exists when demand is greater than supply

• The minimum price producers are willing and able to receive for a product

• One price compared to another; the ratio between two prices

Excess demand

• The situation that exists when demand is greater than supply

• Government restrictions on the minimum and/or maximum prices of certain products

• The situation that exists when supply is greater than demand

• The minimum price producers are willing and able to receive for a product

Excess supply

• The situation that exists when supply is greater than demand

• The situation that exists when demand is greater than supply

• One price compared to another; the ratio between two prices

• The maximum price buyers are willing and able to pay for a product

Market price

• Actual price that prevails in a market at any particular moment

• The maximum price buyers are willing and able to pay for a product

• One price compared to another; the ratio between two prices

• The minimum price producers are willing and able to receive for a product

Price controls

• Actual price that prevails in a market at any particular moment

• Government restrictions on the minimum and/or maximum prices of certain products

• One price compared to another; the ratio between two prices

• A phenomenon that occurs when changes in relative prices cause buyers to replace the purchase of one product with another

Rationing

• A function of relative prices that determines who gets the goods and services produced; determining how scarce resources will be distributed

• The maximum price buyers are willing and able to pay for a product

• Actual price that prevails in a market at any particular moment

• One price compared to another; the ratio between two prices

Relative price

• One price compared to another; the ratio between two prices

• The minimum price producers are willing and able to receive for a product

• The maximum price buyers are willing and able to pay for a product

• Actual price that prevails in a market at any particular moment

Substitution effect

• A phenomenon that occurs when changes in relative prices cause buyers to replace the purchase of one product with another

• The maximum price buyers are willing and able to pay for a product

• The minimum price producers are willing and able to receive for a product

• A function of relative prices that determines who gets the goods and services produced; determining how scarce resources will be distributed

Supply price

• The minimum price producers are willing and able to receive for a product

• The maximum price buyers are willing and able to pay for a product

• Actual price that prevails in a market at any particular moment

• One price compared to another; the ratio between two prices