Microeconomics Flashcard-1

Front

What is market equilibrium?

Back

When quantity supplied equals quantity demanded

Front

What is the effect of a subsidy?

Back

Lowers prices for consumers

Front

What does market elasticity measure?

Back

The responsiveness of quantity demanded or supplied to changes

Front

What is the impact of taxes on supply?

Back

Shifts the supply curve upward

Front

What is the role of government in market control?

Back

To correct market failures and achieve social objectives

Front

What is the effect of consumer expectations on demand?

Back

They can increase or decrease current demand

Front

What is the impact of a surplus in the market?

Back

Prices will decrease

Front

Price ceiling is a legal maximum on the price of a good or service. What is the example of price selling? Minimum wage laws, Sales tax on goods, Rent control, Subsidies for farmers

Back

Rent control

Front

Price floor: a legal minimum on the price of a good or service. Example:

Back

Minimum wage

Front

Price controls are often intended to help the poor, but they often hurt more than help them. Why?

Back

Price controls can create shortages and reduce availability of goods, harming the poor.