Modules 7 - 9

When the price has moved to a level at whichthe quantity demanded of a good equals the quantity supplied of that good. Also referred to as the market-clearing price.

• Equilibrium

• Surplus

• Equilibrium price

• Supply

An economic situation when no individualwould be better off doing somethingdifferent.

• Equilibrium price

• Demand

• Equilibrium

• Price floor

When the quantity supplied exceeds the quantitydemanded.

• Supply

• Surplus

• Shortage

• Demand

The quantity of the good bought and sold at the equilibrium price.

• Equilibrium price

• Equilibrium Demand

• Shortage

• Equilibrium quantity

When the quantity demanded exceeds the quantity supplied.

• Surplus

• Shortage

• Equilibrium

• Demand

Legal restrictions on how high or low a market price may go.

• Price ceiling

• Price controls

• Price floor

• Wasted resources

A maximum price sellers are allowed to charge for a good or service.

• inefficient allocation

• Price ceiling

• Price floor

• Price controls

A minimum price buyers are required to pay for a good or service.

• Surplus control

• Price controls

• Price ceiling

• Price floor

People who want the good badly and are willing to pay a high price don't get it, and those who care relatively little about the good and are only willing to pay a relatively low price do get it.

• Black market

• Inefficient allocation to consumers

• Wasted resources

• inefficiently low quality

People expend money, effort, and timeto cope with the shortages caused by the price ceiling.

• Inefficient allocation to consumers

• Inefficiently low quality

• Wasted resources

• Shortage allocation