Krugman for AP
Module 8
Supply and Demand: Price Controls (Ceilings and Floors)
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| 6350906800 | price controls | legal restrictions on how high or low a market price may go | 0 | |
| 6350906801 | price ceiling | a maximum price that can be legally charged for a good or service; results in a shortage | 1 | |
| 6350906802 | price floor | a minimum price that can be legally charged for a good or service; results in a surplus | 2 | |
| 6350906803 | inefficient allocation to consumers | people who want the good badly and are willing to pay a high price don't get it, and those who care relatively little about the good and are only willing to pay a low price do get it; may result from price ceiling | 3 | |
| 6350906804 | wasted resources | people expend money, effort, and time to cope with the shortages caused by the price ceiling | 4 | |
| 6350906805 | inefficiently low quality | sellers offer low-quality goods at a low price even though buyers would prefer a higher quality at a higher price; may result from price ceiling | 5 | |
| 6350906806 | black market | a market in which goods or services are bought and sold illegally - either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling | 6 | |
| 6350906807 | minimum wage | a legal floor on the wage rate | 7 | |
| 6350906808 | inefficient allocation of sales among sellers | those who would be willing to sell the good at the lowest price are not always those who actually manage to sell it; may result from price floor | 8 | |
| 6350906809 | inefficiently high quality | sellers offer high quality goods at a high price, even though buyers would prefer a lower quality at a lower price; may result from a price floor | 9 |
