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P R I C E S

P R I C E S. Unit Review. P R I C E S. What is a situation in which quantity supplied is greater than quantity demanded? It is also known as excess supply. Shortage Surplus Equilibrium. P R I C E S. Surplus. P R I C E S.

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P R I C E S

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  1. P R I C E S Unit Review

  2. P R I C E S • What is a situation in which quantity supplied is greater than quantity demanded? It is also known as excess supply. Shortage Surplus Equilibrium

  3. P R I C E S • Surplus

  4. P R I C E S What is a situation in which quantity demanded is greater than quantity supplied? Also known as excess demand. Shortage Surplus Equilibrium

  5. P R I C E S • Shortage

  6. P R I C E S • What is a system of allocating scarce goods and services using criteria other than price? Supply Shock Rationing Black market

  7. P R I C E S • Rationing

  8. P R I C E S • What is a market in which goods are sold illegally? Supply Shock Rationing Black Market

  9. P R I C E S • Black Market

  10. P R I C E S • What is a state of balance? Where Quantity Demanded equals Quantity Supplied. Shortage Surplus Equilibrium

  11. P R I C E S • Equilibrium

  12. P R I C E S • What is it called when the government or some outside force sets the market price at a level other than market equilibrium? Price Ceiling Price Floor Price Control

  13. P R I C E S • Price Control

  14. P R I C E S • What is it called when a government regulation is established that prevents prices from rising above a certain level? Price Ceiling Price Floor Price Control

  15. P R I C E S • Price Ceiling

  16. P R I C E S • What is it called when a government regulation is established that prevents prices from falling below a certain level? Price Ceiling Price Floor Price Control

  17. P R I C E S • Price Floor

  18. P R I C E S Which one can lead to a shortage in the market? Price Floor Price Ceiling Which one can lead to a surplus in the market? Price Floor Price Ceiling

  19. P R I C E S Question # 1 • It is a Price Ceiling Question # 2 - It is a Price Floor

  20. P R I C E S • What type of price control is an example of the minimum wage laws? • Price Floor Price Ceiling • What type of price control is an example of the New York City Rent Controls? • Price Floor Price Ceiling

  21. P R I C E S • Question # 1 • Price Floor • Question # 2 • Price Ceiling

  22. P R I C E S • What is a government restriction that is placed on a product that will keep prices from increasing? Price Support Price Freeze

  23. P R I C E S Price Freeze

  24. P R I C E S • What is a government subsidy of an industry to help the market? Price Support Price Freeze

  25. P R I C E S • Price Support

  26. P R I C E S • What industry is the most common of all price supports?

  27. P R I C E S • Agriculture

  28. P R I C E S • How does the “Target Price” system work in a price support by the government?

  29. P R I C E S • The government sets a price for the grain ($ 4.00/bushel). Farmer grows the grain and sells it on the open market (say 20,000 bushels). Say the farmer receives $ 3.00/bu. He would make $ 60,000 for his crop. He then submits to the government for the addition $20,000 that they owe him. He makes $ 80,000 for his work that year.

  30. P R I C E S • What happens to the Equilibrium Price and Quantity if the Supply Curve moves to the RIGHT?

  31. P R I C E S • EP would Decrease and EQ would Increase. EP and EQ would move in the opposite direction.

  32. P R I C E S • What happens to the Equilibrium Price and Quantity if the Supply Curve moves to the LEFT?

  33. P R I C E S • EP would Increase and EAQ would Decrease.

  34. P R I C E S • What happens to the Equilibrium Price and Quantity if the Demand Curve moves to the LEFT?

  35. P R I C E S • EP would Decrease and EQ would Decrease. Both EP and EQ would move in the same direction

  36. P R I C E S • What happens to the Equilibrium Price and Quantity if the Demand Curve moves to the RIGHT?

  37. P R I C E S • EP would Increase and EQ would Increase.

  38. P R I C E S • What is a Incidence of Tax (or Tax Incidence)?

  39. P R I C E S • That is who really pays for the tax that is added to the product during the process of making that unit.

  40. P R I C E S • What happens to the Supply Curve if a tax is added to the production process of a product?

  41. P R I C E S • The Supply Curve would move to the LEFT. It will cost that company more money to produce each unit and thus will have less units they can make.

  42. P R I C E S • What is it called when a consumer goes to the store to buy a product and has a budget, but does not have to spend the whole budget on that product? • Consumer Surplus • Producer Surplus

  43. P R I C E S • Consumer Surplus

  44. P R I C E S • What is called when as a producer you receive more money for your product that you expected to receive? • Consumer Surplus • Producer Surplus

  45. P R I C E S • Producer Surplus

  46. P R I C E S • Draw a Demand Curve for something that is inelastic like Insulin. • Draw a Demand Curve for something that is elastic like Garden Vegetables. • Draw a Supply Curve for something that has natural restriction on it like oranges. • Draw a Supply Curve for something that has no natural restriction on it like personal computers.

  47. P R I C E S • What are the FIVE advantages of Prices?

  48. P R I C E S • They are Neutral, Flexible, Freedom of Choice, No Administrative Costs, and Efficient

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