Chapter 4 Study Guide

Chapter 4 Study Guide - Chapter 4 Study Guide KEY TERMS...

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Chapter 4 Study Guide KEY TERMS Price Controls: Legal restrictions on how high or low a market price may go. Price Ceiling: A maximum price sellers are allowed to charge for a good. Price Floor: A minimum price buyers are required to pay for a good. Inefficient: When there are missed opportunities: some people could be made better off without making other people worse off. Inefficient Allocation To Customers: 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. Wasted Resources: people spend money and expend effort in order to deal with the shortages caused by the price ceiling. Inefficiently Low Quality: sellers offer low-quality goods at a low price even though buyers would prefer a higher quality at a higher price. 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. Minimum Wage: a legal floor on the wage rate, which is the market price of labor. Inefficient Allocation Of Sales Among Sellers:
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Chapter 4 Study Guide - Chapter 4 Study Guide KEY TERMS...

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