1. Prices and Decision Making
Chapter 6 Review
Prices and Decision Making

2. 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

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

4. Concepts
Pg. 150

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

6. 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?

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

8. Concepts
Pg. 158
Pg. 157

9. Concepts Equilibrium What is it? Advantages/Disadvantages
Determining graphically

10. Allocation of Resources
Pg. 163

11. Market Equilibrium
Pg. 163

12. 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.

13. 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.

14. 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?

15. 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.