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AP Micro Module 9 Flashcards

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Krugman for AP
Module 9
Supply and Demand: Quantity Controls

Terms : Hide Images
6350908533quotaan upper limit on the quantity of some good that can be bought or sold; also called a quantity control0
6350908534licensegives its owner the right to supply a good or service; may be issued by the government as a method of imposing a quota1
6350908535demand pricethe price at which consumers will demand a given quantity2
6350908536supply pricethe price at which producers will supply a given quantity3
6350908537wedgeA quota drives a wedge between the demand price and the supply price of a good; that is, the price paid by buyers ends up being higher than that received by sellers.4
6350908538quota rentthe earnings that accrue to the license-holder from ownership of the right to sell the good; equal to the market price of the license when the licenses are traded5
6350908539deadweight lossthe lost gains associated with transactions that do not occur due to market intervention (we will tweak this definition later in the semester)6
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