Chapter 6 Economics Test – Flashcards
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CCC
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An agency in the Department of Agriculture to help stabilize agricultural prices.
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Price ceiling
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A maximum legal price that can be charged for a product.
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Minimum wage
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The lowest legal wage that can be paid to most workers.
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Price floor
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The lowest legal price that can be paid for a good or service
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High prices
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Signals for producers to produce more and for buyers to buy less
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Low prices
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Signals for producers to produce less and for buyers to buy more
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Prices
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Important because they help us make the everyday economic decisions that allocate scarce resources and the products made from them
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Rationing
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A system used to decide who gets what
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System
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Part of an informational network that links all markets in the economy by prices
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Neutral; impartial
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Characteristics of prices in a competitive market economy where participants have a hand in determining them
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Target price
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Essentially the price floor for farm products based on loan supports and deficiency
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Advantages of prices
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Neutral because prices favor neither the producers nor the consumer; flexible; no cost of administration; and something we have known about all our lives.
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Basic economic questions
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What, how, and for whom
