1. Chapter 6 Test Review Equilibrium

2. A price floor for agricultural products set by the government to stabilize farm prices.
Target Price

3. Caused by a price change
Movement along a stable demand curve
Caused by a price change
Change in Quantity Demanded

4. Situation where quantity supplied is greater than quantity demanded at a given price.
Surplus

5. Amount bought at all prices
Shown by a shift of the entire demand curve
Change in Demand

6. Not her
A simplified version of a complex behavior expressed in the form of an equation, graph or illustration.
Economic Model

7. TRIPE or factors that cause a Change in Demand
Tastes and Preferences, Related Goods, Income, population, and expectations
Shifts the entire demand curve
TRIPE or factors that cause a Change in Demand

8. Increase in Demand P S p1 p D1 D Q q q1
D  .: P ↑ & Q ↑

9. The monetary value of a product.
Price

10. Decrease in Demand P S p p1 D D1 Q q1 q
D  .: P↓ & Q↓

11. A loan that neither carries a penalty or further obligation (responsibility) to Pay.
Non-Recourse Loan

12. Caused by a price change
Movement along a stable supply curve
Caused by a price change
Change in Quantity Supplied

13. The lowest legal price by law that can be paid for a product.
Price Floor

14. Amount offered for sale at all prices
Shown by a shift of
a supply curve
Change in Supply

15. NICEPP or factors that cause a Change in Supply
Natural/Manmade, input cost, competition, future expectations, profitability of alternate products and by products.
Shifts the entire supply curve
NICEPP or factors that cause a Change in Supply

16. Increase in Supply P S S1 p p1 D Q q q1
S  .: P ↓ & Q ↑

17. Decrease in Supply S1 P S p1 p D Q q1 q
S  .: P↑ & Q↓

18. The highest legal price by law that can be charged for a product.
Price Ceiling

19. Quantity supplied is more than quantity demanded
Situation when price offered for sale is more than the equilibrium price.
Quantity supplied is more than quantity demanded
Surplus

20. Quantity demanded is more than quantity supplied.
Situation when price offered for sale is less than the equilibrium price.
Quantity demanded is more than quantity supplied.
Shortage

21. Simultaneous Changes in Supply and Demand
If supply and demand both increase then price is _____________ and quantity is ________________.
price is indeterminate, but quantity definitely increases

22. Simultaneous Increase in Supply & DemandQ q q1 q2
S  & D  .: P ? & Q ↑

23. The quantity of output supplied that is equal to the quantity demanded at the equilibrium price.
Equilibrium Quantity

24. price is indeterminate, but quantity definitely decreases
If supply and demand both decrease then price is __________ and quantity is __________.
price is indeterminate, but quantity definitely decreases

25. Simultaneous Decrease in Supply & DemandQ q2 q1 q
S  & D  .: P ? & Q↓

26. The price where quantity supplied equals quantity demanded.
Equilibrium Price

27. Simultaneous Changes in Supply and Demand
If supply decreases while demand increases, then price is ________ and quantity is ___________.
then price definitely increases while quantity is indeterminate

28. Decrease in Supply w/ Simultaneous Increase in DemandQ q1 q
S  & D  .: P↑ & Q ?

29. A fuel created from living materials like corn.
Biofuels

30. If supply increases while demand decreases, then price is ________ and quantity is _____________.
then price definitely decreases while quantity is indeterminate

31. System of allocating goods and services without prices.
Rationing

32. Increase in Supply w/ Simultaneous Decrease in DemandQ q q1
S  & D  .: P↓ & Q?

33. Causes of Disequilibrium
– a minimum price for a good/service or resource determined outside of the market
Price floor
Ex. Minimum wage

34. Situation where quantity supplied is less than quantity demanded at a given price.
Shortage

35. A maximum price for a good/service or resource determined outside of the market
Price ceiling
Ex. Rent control on apartments in Manhattan, New York