| interactive activity
Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Willingness to pay Individual consumer surplus Total consumer surplus Consumer surplus Cost Individual producer surplus Total producer surplus Producer surplus Total surplus Price controls Price ceiling Price floor Deadweight loss Inefficient allocation to consumers Wasted resources Inefficiently low quality Black markets Minimum wage Inefficient allocation of sales among sellers Inefficiently high quality Quantity control Quota Quota limit License Demand price Supply price Wedge Quota rent | legal restrictions on how high or low a market price may go. the right, conferred by the government or an owner, to supply a good. the price of a given quantity at which consumers will demand that quantity. 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. the sum of the individual producer surpluses of all the sellers of a good in a market. the maximum price a consumer is prepared to pay for a good. the total net gain to consumers and producers from trading in a market; the sum of the consumer surplus and the producer surplus. a form of inefficiency in which people who want a 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; often a result of a price ceiling. tefers to either individual producer surplus or total producer surplus. the net gain to an individual buyer from the purchase of a good; equal to the difference between the buyer's willingness to pay and the price paid. an upper limit on the quantity of some good that can be bought or sold; also referred to as a quantity control. the loss in total surplus that occurs whenever an action or a policy reduces the quantity transacted below the efficient market equilibrium quantity. the lowest price at which a seller is willing to sell a good. a legal floor on the wage rate. The wage rate is the market price of labor. the sum of the individual consumer surpluses of all the buyers of a good in a market. a form of inefficiency in which sellers offer low- the total amount of a good under a quota or quantity control that can be legally transacted. an upper limit on the quantity of some good that can be bought or sold; also referred to as a quota. the minimum price buyers are required to pay for a good or service; a form of price control. a form of inefficiency in which sellers offer high- a term often used to refer both to individual consumer surplus and to total consumer surplus. the net gain to an individual seller from selling a good; equal to the difference between the price received and the seller's cost. the price of a given quantity at which producers will supply that quantity. a form of inefficiency in which sellers who are willing to sell at the lowest price are unable to make sales while sales go to sellers who are only willing to sell at a higher price. the maximum price sellers are allowed to charge for a good or service; a form of price control. the difference between the demand price of the quantity transacted and the supply price of the quantity transacted for a good when the supply of the good is legally restricted. Often created by a quantity control, or quota. the difference between the demand price and the supply price at the quota limit; this difference, the earnings that accrue to the license- a form of inefficiency in which people expend money, effort, and time to cope with the shortages caused by a price ceiling. |