AP Micro Module 9 Flashcards
Krugman for AP
Module 9
Supply and Demand: Quantity Controls
Terms : Hide Images [1]
| 6350908533 | quota | an upper limit on the quantity of some good that can be bought or sold; also called a quantity control | 0 | |
| 6350908534 | license | gives its owner the right to supply a good or service; may be issued by the government as a method of imposing a quota | 1 | |
| 6350908535 | demand price | the price at which consumers will demand a given quantity | 2 | |
| 6350908536 | supply price | the price at which producers will supply a given quantity | 3 | |
| 6350908537 | wedge | A 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 | |
| 6350908538 | quota rent | the 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 traded | 5 | |
| 6350908539 | deadweight loss | the lost gains associated with transactions that do not occur due to market intervention (we will tweak this definition later in the semester) | 6 |