Chapter 6: Prices and Decision Making

The point where quantity supplied equals quantity demanded.

• market equilibrium

• balanced market

• rationing

• price equality

The monetary value of a product established by supply and demand

• market equilibrium

• price

• value theory

• expense balance

The system where a central authority decides how much any person receives.

• free market

• price theory distribution

• oligarchy

• rationing

Which is not a problem with rationing?

• Most feel their share is too small.

• Expensive to administrate.

• Inefficient due to no control of resources.

• Less incentive to innovate or improve.

Maximum price allowed by law for a product.

• price ceiling

• price floor

• deficiency price

• fair market price

Minimum price allowed by law for a product.

• price ceiling

• price floor

• deficiency price

• fair market price

The process where farmers are given money to repay and guaranteed a specific price on their crop.

• deficiency payment

• price floor

• contract price

• loan support

When the quantity demanded is more than the quantity supplied.

• shortage

• surplus

• price floor

• price ceiling

When the quantity supplied is more than the quantity demanded.

• shortage

• surplus

• price floor

• price ceiling

Jimmy is a farmer, and his crop is selling for significantly less than expected. Which program will help him break even?

• price floor

• price ceiling

• deficiency payment

• arson