EPF 3 Quiz Review

The mandated maximum amount a seller is allowed to charge for a product or service.

What are disadvantages of price ceilings?

The price of an item will do up if the supply decreases or if the demand for the item increases.

A complementary good is a good that can take the place of another good

________ measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.

___is the study of the choices that individuals make and the way these choices interact and are influenced by government

___ is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price

What is supply?

A change in the price of the product will cause a change in quantity supplied.

What are the two key determinants of price?

The price of an item is usually pushed toward the level at which the quantity supplied will equal the quantity demanded.

What are examples of a substitue good?

Substitute goods are goods that are used together

What are advantages of price floors?

The price of an item will go down if the supply increases or if the demand for the item increases.

The willingness and ability of people to purchase goods/services at a variety of prices within a time period.

_______ when government laws regulate prices instead of letting market forces determine prices.

Price ceilings are essentially set to prevent an overcharge on luxury/leisure items.

__________ is the percentage change in quantity supplied divided by the percentage change in price.

What are advantages of price ceilings?

Increase in demand or reduction in supply will raise _____; increase in supply or a reduction in demand will lower them.

What is an example of price floor?

______ is the lowest legal price that can be paid in a market for goods and services, labor, or financial capital.

What are disadvantages of price floors?

________ in any market is the price at which quantity demanded equals quantity supplied.