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 Black Market Minimum wage Inefficient Allocation of Sales Among Sellers Inefficiently High Quality Quantity control Quota Quota limit License Demand price Supply price Wedge Quota rent | the price of a given quantity at which consumers will demand that quantity the lowest price at which a seller is willing to sell a good 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 the total amount of a good under a quota or quantity control that can be legally transacted a form of inefficiency in which people expend money, effort, and time to cope with the shortages caused by a price ceiling. an upper limit on the quantity of some good that can be bought or sold; also referred to as a quota 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 minimum price buyers are required to pay for a good or service; a form of price control the maximum price sellers are allowed to charge for a good or service; a form of price control a legal floor on the wage rate. The wage rate is the market price of labor an upper limit on the quantity of some good that can be bought or sold; also referred to as a quantity control. the net gain to an individual seller from selling a good; equal to the difference between the price received and the seller’s cost. a term often used to refer both to individual consumer surplus and to total consumer surplus. the difference between the demand price and the supply price at the quota limit; this difference, the earnings that accrue to the licenseholder, is equal to the market price of the license when the license is traded 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. the sum of the individual consumer surpluses of all the buyers of a good in a market the total net gain to consumers and producers from trading in a market; the sum of the consumer surplus and the producer surplus. refers to either individual producer surplus or total producer surplus. the sum of the individual producer surpluses of all the sellers of a good in a market the price of a given quantity at which producers will supply that quantity a form of inefficiency in which sellers offer highquality goods at a high price even though buyers would prefer a lower quality at a lower price; often the result of a price floor. the right, conferred by the government or an owner, to supply a good a form of inefficiency in which those who would be willing to sell a good at the lowest price are not always those who actually manage to sell it; often the result of a price floor the loss in total surplus that occurs whenever an action or a policy reduces the quantity transacted below the efficient market equilibrium quantity. 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 maximum price a consumer is prepared to pay for a good legal restrictions on how high or low a market price may go |
Willingness to pay, p. 106
Individual consumer surplus, p. 107
Total consumer surplus, p. 107
Consumer surplus, p. 107
Cost, p. 109
Individual producer surplus, p. 109
Total producer surplus, p. 109
Producer surplus, p. 109
Total surplus, p. 112
Price controls, p. 113
Price ceiling, p. 113
Price floor, p. 113
Deadweight loss, p. 116
Inefficient allocation to consumers, p. 118
Wasted resources, p. 119
Inefficiently low quality, p. 119
Black markets, p. 119
Minimum wage, p. 122
Inefficient allocation of sales among sellers, p. 125
Inefficiently high quality, p. 125
Quantity control, p. 128
Quota, p. 128
Quota limit, p. 128
License, p. 128
Demand price, p. 129
Supply price, p. 129
Wedge, p. 131
Quota rent, p. 131