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11 Cards in this Set
- Front
- Back
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Price Controls |
An attempt to set prices through government involvement in the market. -enacted to ease perceived burdens on society |
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Price Ceiling |
Legally established maximum prices for goods or services. |
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Black Markets |
Illegal markets that arise when price controls are in place. -help supply meet demand. -Ex. If bread prices go down, lines are going to get longer and consumers will not like that, so sellers will go underground (illegal means) and sell bread at a higher price for those who don't want to wait in the long lines. |
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Nonbinding Price Ceilings |
When a price ceiling is above the equilibrium price |
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Binding Price Ceilings |
When a price ceiling is below the equilibrium price |
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Rent Control |
A price ceiling that applies to the housing market -governments goal to keep housing affordable |
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Price Gouging |
A price control that places a temporary ceiling on the prices that sellers can change during times of emergency. |
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Price Floors |
Legally established minimum prices for goods or services |
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Nonbinding Price Floors |
Price set below the market equilibrium |
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Binding Price Floors |
Price set above market equilibrium |
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Minimum Wage |
The lowest hourly wage rate that firms may legally pay their workers -functions as a price floor -often non binding and has no affect on the market (wouldn't matter if it went up) |
