Prices and Decision Making

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Presentation transcript:

Prices and Decision Making Chapter 6 Review Prices and Decision Making

Concepts The economics of prices What do prices represent? How are they derived? Why do they perform effectively and efficiently? The signals that they send

Concepts Surpluses/Shortages Determining them. What are they? How does the market correct these situations? Graphically, how are they represented? Examples.

Concepts Pg. 150

Concepts Rationing e-commerce Advantages/Disadvantages How do they work? e-commerce What is it? Advantages/disadvantages

Concepts What do “price supports” do? Competitive Markets How do they function? Competitive Markets How do they work? What part do they play in the economy?

Concepts Price Ceilings Price Floors Advantages/Disadvantages How do they work? Examples Price Floors

Concepts Pg. 158 Pg. 157

Concepts Equilibrium What is it? Advantages/Disadvantages Determining graphically

Allocation of Resources Pg. 163

Market Equilibrium Pg. 163

Essays/Short Answers How can the price system help allocate resources? How does government interference in the market hinder the market’s ability to self-adjust? Identify 2 ways the government has interfered with the price system.

Essays/Short Answers Using supply and demand concepts, explain what is meant by a seller’s market. Also, be able to determine the outcome of a surplus/shortage situation.

Essays/Short Answers Identify and explain what happens when governments set price ceilings and price floors. How are minimum wage laws both an advantage and disadvantage?

Essays/Short Answers Be able to identify equilibrium from a supply/demand schedule. Also, be able to determine what happens to supply and demand when price changes as sellers adjust their prices.