Economics Chapter 5 Test

Public Good

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Goods/Services provided by the government

• Limitations of the price system

• Government regulation that establishes a minimum level for prices

Price Ceiling

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Government regulation that establishes a maximum price for a particular good

• Occurs when the quantity supplied and the quantity demanded for a product are equal at the same price

• Government regulation that establishes a minimum level for prices

Price Floor

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Government regulation that establishes a maximum price for a particular good

• Occurs when the quantity supplied and the quantity demanded for a product are equal at the same price

• Government regulation that establishes a minimum level for prices

Positive Externality

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Limitations of the price system

• Occurs when the quantity supplied and the quantity demanded for a product are equal at the same price

• When someone who does not produce or consume a product benefits from its production

Market Failures

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Goods/Services provided by the government

• Occurs when the quantity supplied and the quantity demanded for a product are equal at the same price

• Limitations of the price system

Market Equilibrium

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Goods/Services provided by the government

• Occurs when the quantity supplied and the quantity demanded for a product are equal at the same price

• Limitations of the price system

Price System

• The system on which a free-enterprise economy primarily relies to answer the three economic questions

• Goods/Services provided by the government

• Occurs when the quantity supplied and the quantity demanded for a product are equal at the same price

• Limitations of the price system

Match the following

• price where Demand exceeds supply

• Shortage

• Price where Q supplied = Q demanded

• Surplus

• price where Supply exceeds demand

• Market Equilibrium

Select all that are examples of Public Goods ​ ​ (a)   ​ (b)   ​ (c)   ​ (d)   ​ (e)  

• Police
• Bank of America
• Fire Stations
• County Hospitals
• Fast Food
• This School
• Military

At what price is market equilibrium for Chia Pets?

• $30

• $1

• $10

• $20