ECO130 - Topic 5

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Lea_
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299121
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ECO130 - Topic 5
Updated:
2015-03-25 02:00:57
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ECO130
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ECO130 - Topic 5 (4)
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  1. Change in Demand
    Shift of the demand curve.
  2. Change in Quantity Demanded
    Movement along the demand curve.
  3. Price Ceiling
    A legally established maximum price a seller can charge.

    Price ceiling below equilibrium = black market
  4. Price Floor
    A legally established minimum price a seller can be paid.

    Price floor above equilibrium = unemployment
  5. Market Failure
    The price system fails to operate efficiently, creating a problem for society.

    • - Lack of competition
    • - Externalities
    • - Public goods
  6. Lack of Competition
    There must be competition among both producers and consumers for markets to function effectively.
  7. Externalities
    A cost or benefit imposed on people other than the consumers and producers of a good or service.

    If present, market failure gives incorrect price and quantity signals and, as a result, resources are misallocated.
  8. Public Good
    A good or service that, once produced, has two special properties.

    • - Users collectively consume benefits
    • - There is no way to prevent people who do not pay from consuming the good or service

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