Economy- Chapter 6

A system of allocating scarce goods and services using some criteria other than price:

rationing
price floor
excess demand
surplus
equilibrium

rationing

Which is a situation that makes the market behave inefficiently?

when both consumers and producers are fully informed about a product
when producers have the power to find out exactly what to produce
when consumers do not have enough information to make good choices
when the market is in perfect competition and prices are high

when consumers do not have enough information to make good choices

Why did the U.S. government use rationing for some foods and consumer goods during World War II?

to guarantee each civilian a minimum standard of living in wartime
to keep sellers from raising prices on necessary goods
to earn more money to support the military
because the English government had also declared rationing

to guarantee each civilian a minimum standard of living in wartime

Which is an example of a good whose price goes down because of improvements in technology?

computer printers
running shoes
hard-bound books
pencils

computer printers

Why did Communist governments use a command economic system for many years?

as a way to avoid the expense and difficulties of a free market
as a method of keeping consumers from getting what they wanted
to limit the costs of production of many goods
in an attempt to create a society in which everyone was equal

in an attempt to create a society in which everyone was equal

A sudden lack of goods:

supply shock
shortage
excess supply
disequilibrium
search costs

supply shock

When quantity supplied is more than quantity demanded:

supply shock
shortage
excess supply
disequilibrium
search costs

excess supply

The price ceiling that was used to control the price of housing in New York City and other cities was called ____________ .

rent control
rent abatement
housing control
equilibrium price

rent control

The point at which quantity supplied and quantity demanded are the same:

rationing
price floor
excess demand
surplus
equilibrium

equilibrium

Situation in which quantity supplied is greater than quantity demanded:

rationing
price floor
excess demand
surplus
equilibrium

surplus

What is the name of the least amount that legally may be paid to most workers for an hour of work?

equilibrium price
supply cost
price floor
minimum wage

minimum wage

What happens to a market in equilibrium when there is an increase in supply?

Quantity supplied will exceed quantity demanded, so the price will drop.
Quantity demanded will exceed quantity supplied, so the price will drop.
Excess supply means that producers will make less of the good.
Undersupply means that the good will become very expensive.

Quantity supplied will exceed quantity demanded, so the price will drop.

What happens when the supply of a nonperishable good is greater than what consumers want to buy?

the good is discarded
the good becomes a luxury and the price rises
either the good is saved for later sale or the price is raised
either the good remains unsold or the price drops

either the good remains unsold or the price drops

Situation in which quantity demanded is greater than quantity supplied:

supply shock
shortage
excess supply
disequilibrium
search costs

shortage

A minimum price for a good or service:

rationing
price floor
excess demand
surplus
equilibrium

price floor

When quantity supplied and quantity demanded are not the same in a market:

supply shock
shortage
excess supply
disequilibrium
search costs

disequilibrium

When quantity demanded is more than quantity supplied:

rationing
price floor
excess demand
surplus
equilibrium

excess demand

On what type of goods do governments generally place price ceilings?

those that are cheap but could become more expensive without the ceiling
those that are essential but too expensive for some people
those that are essential and cheap
those that are not necessary but have become customary

those that are essential but too expensive for some people

What condition has been reached when buyers will purchase exactly as much as sellers are willing to sell?

supply and demand
excess demand
equilibrium
price floor

equilibrium

What happens when wages are set by law above the equilibrium level?

Firms employ fewer workers than they would at the equilibrium wage.
Firms employ more workers than they would at the equilibrium wage.
Firms tend to try to break the law and hire people at the equilibrium level.
Firms hire more workers but for fewer hours than they would at the equilibrium wage.

Firms employ fewer workers than they would at the equilibrium wage.

The financial and opportunity costs consumers pay when looking for a good or service:

supply shock
shortage
excess supply
disequilibrium
search costs

search costs