Search costs
are the financial and opportunity costs consumers pay when searching for a good or service.
Is the minimum amount that may be legally charged for a good or a service?
A price floor
is the lowest price that one can legally charge for some good or service.
What is the name of the smallest amount that can be charged paid for an item?
A minimum payment
is the smallest amount of money you have to pay each month to keep your account current. While issuers calculate minimum payments differently, many set a minimum or “floor” — most commonly $25, according to the Consumer Financial Protection Bureau — which is the lowest payment you’ll be charged.
Which of the following would not shift the demand curve for a good or service?
A change in price
does not shift the demand curve. It only shows a difference in the quantity demanded. The demand curve will move left or right when there is an underlying change in demand at all prices.
What are the benefits and drawbacks of a price ceiling quizlet?
The benefits of a price ceiling are that
it prevents prices of essential goods from becoming too high to afford
. But the drawbacks of a price ceiling are that it causes excess demand and prevents prices from rising to equilibrium level, so it results in shortage.
What is a maximum price that can be legally charged for a good?
A price ceiling
is a government-mandated maximum price that can be charged for a good or service. A price ceiling holds if the equilibrium price exceeds the price ceiling and there is a shortage of the good.
What are signs of a shortage in a market?
A shortage, in economic terms, is a condition where the quantity demanded is greater than the quantity supplied at the market price. There are three main causes of shortage—
increase in demand, decrease in supply, and government intervention
. Shortage should not be confused with “scarcity.”
Which factor can cause a shift in supply?
Factors that can shift the supply curve for goods and services, causing a different quantity to be supplied at any given price, include
input prices, natural conditions, changes in technology, and government taxes, regulations, or subsidies
.
Does price affect supply curve?
Although a change in price of a good or service typically causes a change in quantity supplied or a movement along the supply curve for that specific good or service,
it does not cause the supply curve itself to shift
.
What is shift in supply curve?
Key Takeaways.
Change in supply
refers to a shift, either to the left or right, in the entire price-quantity relationship that defines a supply curve. Essentially, a change in supply is an increase or decrease in the quantity supplied that is paired with a higher or lower supply price.
What are benefits and drawbacks of price ceiling?
Price can’t rise above a certain level. This can reduce prices below the market equilibrium price. The advantage is that it may lead to lower prices for consumers. The disadvantage is
that it will lead to lower supply
.
What may be the consequences of price ceiling?
Price ceilings prevent a price from rising above a certain level. When a price ceiling is set below the equilibrium price,
quantity demanded will exceed quantity supplied
, and excess demand or shortages will result.
What is minimum price ceiling?
National and local governments sometimes implement price controls, legal minimum or maximum prices for specific goods or services, to attempt managing the economy by direct intervention. … A price ceiling is the legal maximum price for a good or service, while
a price floor
is the legal minimum price.
Why would an inefficient factory close down under capitalism?
What is the primary incentive that motivates a manufacturer to sell a product? Which type of economy produces the highest standard of living for its citizens? Why would an inefficient factory close down under capitalism? …
The producers are likely to earn a profit making products people want.
What is a sudden shortage of a good called?
A sudden shortage of goods is called
a supply shock
and results in a change of price.
What happens to the price of a good when there is excess demand?
Excess demand causes
the price to rise and quantity demanded to decrease
. … For any quantity, consumers now place a lower value on the good, and producers are willing to accept a lower price; therefore, price will fall.
